Liberty Ostrava unions continue strike readiness, say management refusing to consult

The main union at Czech steelmaker Liberty Steel Ostrava has said it will continue its strike readiness in response to the plant management's refusal to consult over strategic issues, such as the selection and installation of two new hybrid furnaces.

"Unfortunately the employer's refusal to consult over key issues does not give us any other option than to continue strike readiness and consider other options, such as protest meetings, informing the media and other legitimate steps," the Kovo union said in its latest monthly newsletter that sent to S&P Global Platts Aug. 26.

The Kovo union initially announced its strike readiness on April 13 amid concerns about the Ostrava plant's future and moves by owner, the GFG Alliance, to address its serious financial problems. Unions were particularly concerned about group moves to sell some of the plant's valuable carbon allowances, a move that eventually took place in spite of earlier assurances to Czech government ministers that it would not happen. Liberty Steel said May 5 that most of the revenues from the emissions sale had been returned to the Ostrava steelmaker, with the remainder due within days.

Liberty Steel announced in November 2020 that it had launched a tender for two electric powered hybrid furnaces as part of a Eur750 million investment into the Ostrava plant over the following 10 years. The investment includes new steel milling technology.

The hybrid furnaces to be installed by 2023 should replace the four existing coal fired tandem furnaces and will have the advantage of allowing the steelmaker to source local scrap steel and considerably reduce its use of coal and imports of iron ore. The steelmaker said in the statement that 70% use of scrap steel should be possible in 2025, when a new 400 kv electricity line is connected.

"[Management] appears to be concerned that negotiations with the unions might influence the choice of supplier for the new hybrid foundry," the union said in its newsletter, adding that the investment is crucial for the steelmaker's future and that it has been lobbying for a faster completion of the high voltage connection that would allow the hybrid furnaces to be fully operational and, together with other technology, allow a 50% cut in the plant's carbon footprint.

Steel output rebounds

Liberty Steel Ostrava spokesperson Barbora Cerna-Dvorakova told Platts in an email reply Aug. 26 that the company "continues to focus on its ambitious modernization plans....this includes the installation of the new steelmaking technology."

Cerna-Dvorakova added in the statement that Liberty Steel Ostrava is also aiming to recover steel production levels to 2.5 million mt/year from the reduced 1.7 million mt/year in 2020 due to the impact of the COVID-19 pandemic.

Liberty Steel Ostrava earlier Aug. 26 reported Q2 2021 steel shipments of 684,000 mt, up 12% quarter on quarter. Steel production during the latest quarter was almost 80% higher than in April-June 2020, and was the best single production quarter since 2017, it said. The steelmaker said it has been able to switch production from flat and long products and profit from the strong flat market over the last six months.

Liberty Steel Ostrava said in the results statement that it also expects the strong results performance to continue into the second half of 2021, with total annual production bouncing back to around 2.5 million mt.