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ArcelorMittal needs cheap power, hydrogen for German steel revamp

FILE PHOTO: The ArcelorMittal metals plant in Dunkirk

DUESSELDORF (Reuters) - Steelmaker ArcelorMittal may not go ahead with plans to decarbonise its steel plants in Germany unless it gets cheap electricity as well as a sufficient supply with renewables and hydrogen, it warned on Friday.

"If the framework conditions with internationally competitive energy prices and available quantities of green electricity and hydrogen are not in place, there's an increased risk of industrial production capacity leaving," said Thomas Buenger, who heads the steelmaker's German division.

He said these conditions would have to be met by the middle of 2025 at the latest, which is when ArcelorMittal aims to take a final investment decision regarding its 2.5 billion euro ($2.7 billion) plan to decarbonise its German steel mills.

Of this sum, around 1.3 billion euros are covered by German government subsidies, similar to decarbonisation projects at peers Thyssenkrupp and Salzgitter that all require public support.

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Buenger said the detailed planning and review of the economic viability of the transformation plans were currently underway.

($1 = 0.9204 euros)

(Reporting by Tom Kaeckenhoff; Writing by Christoph Steitz; Editing by Louise Heavens)