ArcelorMittal investing US$290mn in 2 Brazilian solar plants

Luxembourg-based steelmaker ArcelorMittal signed contracts to install two solar energy plants in Brazil, involving total investments of 1.59 billion reais (US$288 million) as part of its plans to reduce greenhouse gas emissions.

"Metals and mining companies have strict and ambitious rules for cutting greenhouse emissions by 2030. Additionally, many are also looking to invest in self-generation of energy, which is why new projects and investments on this front will continue to appear over the coming quarters and years," Janaina Donas, president of Brazilian aluminum association ABAL, told BNamericas.

According to Donas, companies operating in Brazil's aluminum industry are currently engaged in a cycle of investments involving around 30bn reais, due to be completed in 2025, aimed mainly at expanding capacity and migrating to renewable energy supply.

Meanwhile, mining companies in the country have outlined plans to invest a total of US$10.7bn in sustainability, which includes renewable energy projects, in 2024-28. That is around 63% more than in the five years from 2023 to 2027, according to data compiled by mining association Ibram.

ArcelorMittal penned the solar energy deals with renewable energy firms Casa dos Ventos and Atlas Renewable Energy to help move toward its objective of self-sufficiency in electricity for its industrial units and to decarbonize its operations in the country. 

“ArcelorMittal understands that a global low-carbon economy and mitigating the impacts of climate change are fundamental to a sustainable future, and the energy transition is an essential step in our decarbonization strategy," Jefferson De Paula, president of ArcelorMittal's Brazilian unit, said in a statement.

The two plants will supply the equivalent of 14% of the current electricity consumption of ArcelorMittal units in Brazil.

With Atlas Renewable Energy the objective is to build the Luiz Carlos Solar Energy Park in Paracatu, a municipality in the northwest of Minas Gerais state. 

The company will invest 895mn reais in this project, which will have an installed capacity of 269MW. 

The project also includes the installation of a 65km, 500kV transmission line to the national grid (SIN) and a step-up substation.   

The contract between the steelmaker and Atlas is under the build, operate and transfer (BOT) model, in which a joint venture is formed during construction and, after starting commercial operations in December 2025, all capital will be acquired by ArcelorMittal. 

All of the electric power generated by the plant will be supplied to ArcelorMittal's operations. 

Meanwhile, with Casa dos Ventos, ArcelorMittal is forming a new joint venture to build a solar generation facility in the same area as the Babilônia Centro wind complex, still under construction, in Morro do Chapéu and Várzea Nova municipalities, in Bahia state. 

Under the agreement, ArcelorMittal will have a 55% equity stake and Casa dos Ventos will hold the remaining 45%. With an investment of approximately 690mn reais, the plant will have installed capacity of 200MW. It is also expected to start commercial operations in December 2025.