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ArcelorMittal acquired 51 per cent of BH Steel, located in Zenica, Bosnia, in August 2004. As part of the agreement with the government of the Federation of Bosnia-Herzegovina and the Kuwaiti Investment Agency, ArcelorMittal agreed to invest $80 million in new share capital, $65 million in working capital and a further $135 million on new plant and equipment over ten years. The sums represent the biggest ever foreign investment in Bosnia-Herzegovina.
BH Steel currently produces 220,000 tons of steel, made up of a variety of long products, including forgings, bar and rod. ArcelorMittal is confident that its production capacity can be substantially increased by the implementation of the capital expenditure programme. This will include restarting the integrated production route at BH Steel, commissioning of electric arc furnace production, modernising the remaining facilities and improving the product portfolio.
The acquisition complements the joint venture agreement reached earlier in the year with RZR Ljubija for the mining and development of the Ljubija iron ore mines.
ArcelorMittal has stated its intention to retain all 2,850 active employees of BH Steel and expects to recruit further as BH Steel reaches its full production capacity.
Pending required approvals BH Steel will be renamed ArcelorMittal Zenica.