THE effort to revive steel production in Trinidad and Tobago stalled last week when ArcelorMittal receiver Christopher Kelshall missed a meeting at the Couva/Point Lisas Chamber of Commerce office.
It was one more episode in the long history of the ISCOTT steel mill, built as a cornerstone of the Point Lisas development project and beginning operations in 1980 with a flush of ambition for the country’s industrial future. The company never fulfilled that dream and almost immediately ran into technical and financial difficulties.
ISCOTT began operating just as steel production fell into decline after a mix of price wars and alternative materials reshaped the market. When the plant was first leased and then sold to Laskshmi Mittal in 1989, any hope of turning around the company was long gone.
Mittal got his second steel mill at a great price and Caribbean Ispat was born. Mittal turned around the fortunes of the mill in short order and built a substantial personal empire based on his success in TT. But steel is a cyclic business, and by 2002, Mittal was looking for other sources of revenue locally, suddenly increasing the price of wire rods on the local market by 25 percent.
Between 2003 and 2007, local raw steel production would drop from 923,000 metric tons to 670,000.Mittal Steel merged with Arcelor in 2006. In 2015, the company lost US$281 million in the face of increased utility payments, taxes and port fees. A four-month programme of temporary layoffs was introduced to reduce production costs but that ended with the plant’s abrupt closure in March 2016 in the face of a debt of $1.3 billion, most of which was owed to its parent company.
NuCor, a local direct reduced iron producer expressed interest in the plant but allowed its US$20 million bid for the plant to expire in September 2018 after almost a year of extensions.
In May Aeternus Steel Holdings Ltd, a joint venture between TT’s Integritus Group and Dubai’s Cassia Group won the bid for the plant with an offer of US$41 million in a new bid round that began in January.
Maccari Steel Holdings lost that round with a bid of US$27 million. By August, Maccari director Unanand Persad claimed that Aeternus had also withdrawn and that his company had made a US$180 million offer to the receiver to restart, rehabilitate and operate the plant.
If so, Christopher Kelshall’s absence from the meeting suggests that there is need for greater clarity in these ongoing negotiations, particularly in the face of local as well as international interest in the resumption of operations at the plant.