Hydnum EAF mill in Spain receives funding

Investors backing the construction of an electric arc furnace (EAF) steel mill in central Spain reportedly have secured 60 million euros ($68 million) in funding from an industrial decarbonization program in that nation.

Hydnum Steel, the backers of which intend to build a 2.6 million-tons-per-year EAF mill in Puertollano, Spain, say the funding has been granted by the Madrid-based PERTE for Industrial Decarbonization program, which is designed to accelerate the green transition of the industrial sector.

On its website, Hydnum Steel lists three Europe-based technology providers and a Spanish energy company as partners. The technology firms are Germany-based Siemens, Spain-based Russula and London-based Primetals Technologies, and the energy firm is Abei Energy.

The project has been seeking funding and firming up its plans for two years. Previous reports on Hydnum Steel indicate one of its financial backers is holding company Helvella.

Hydnum Steel anticipates using 100 percent renewable energy and on its website lists recycled steel as a key raw material in the production of green steel.

In addition to its adoption of “circular economy principles applied to heavy industry [via] the intensive use of metal scrap as raw material,” Hydnum says it will install smart production systems integrating computer vision, predictive analytics and artificial intelligence (AI) to ensure steel quality, staff safety and optimal energy performance.

While recycling could be part of its plans, in June 2023, Hydnum Steel and Primetals signed a memorandum of understanding that includes the construction of a direct-reduced iron (DRI) production unit, presumably at the Puertollano site.

Construction is scheduled to begin in Puertollano by the end of this year, with the initial phase targeting production of 1.5 million tons of steel per year, supplying the automotive, construction and renewable energy sectors.

The firm says the EAF mill has been declared a "priority project” by the regional government of Castilla-La Mancha in Spain.

It also indicates the funding comes at a bittersweet time, after Hydnum Steel’s backers attended a memorial service April 22 and “said farewell in Barcelona to Agustín Escobar, a key figure in the project’s beginnings.”

Escobar, who had been the CEO of Siemens Spain, along with his wife and their three children, were involved in a sightseeing helicopter crash in New York earlier this month.

“This achievement is, above all, a tribute to Agustín Escobar, whom we said goodbye to alongside his entire family,” Russula and Hydnum Steel CEO Eva Maneiro says. “He was the one who believed in this dream from the very beginning, who paved the way for this steel plant to be built in Puertollano. His vision, his faith in innovation and his belief that a different kind of industry is possible will always define the DNA of Hydnum Steel.”

The Hydnum Steel mill is being designed to produce hot-rolled flat steel.

“Currently, Europe faces a structural deficit in the [EAF] production of this type of steel, with over 90 percent of consumption coming from traditional blast furnaces and a significant dependence on high carbon footprint imports,” Hydnum says.

The firm says its Puertollano plant would help narrow that deficit and align the European steel sector with the European Union’s decarbonization goals.

Even before its first melt, Hydnum Steel says it has secured the sale of 75 percent of its production for the first seven years of operation through strategic agreements with major sector players such as Gonvarri Industries, Thyssenkrupp Materials Processing Europe and Knauf Interfer.

Spain’s EAF steel sector has received additional investments this decade, with ArcelorMittal having broken ground on an EAF production line for long products in Gijón, Spain, last year. The global steelmaker expects that facility to begin ramping up in the first quarter of 2026.

The Spain-based EAF producer formerly known as Celsa Group has emerged from a creditor takeover process and now is in the hands of Prague-based Sev.en Global Investments. The firm also recently attracted an investor in the form of Barcelona-based investment holding company CriteriaCaixa.