Salzgitter Cuts HKM Workforce by Two-Thirds in Green Steel Pivot

Salzgitter AG took full ownership of HKM, the Duisburg steel mill previously co-owned by thyssenkrupp Steel and Vallourec. Contracts were signed July 8. The share transfer closes later today. Integration into the Salzgitter Group starts immediately.

Salzgitter plans to install an electric arc furnace at the Duisburg site. The shift is designed to cut CO2 emissions from steel production by 90% over the long term. That transformation comes with heavy restructuring. The workforce at HKM will fall from roughly 3,000 to about 1,000. Crude steel output drops to 2 million metric tons per year from an unspecified current level. Without those job cuts, Salzgitter said it could not have completed the acquisition. The alternative was to shut down the integrated mill entirely.

“We took the time needed to negotiate with the co-shareholders to date regarding the continuation of HKM under our sole responsibility,” said Gunnar Groebler, CEO of Salzgitter AG. “Given the complexity of these discussions and the great significance of the outcome for the employees in Duisburg, exacting thoroughness clearly took precedence over speed in this process. We are pleased that we have now found a satisfactory solution for all parties involved.”

Groebler added: “With the acquisition of the shares held by our former co-shareholders, we are now in full responsibility at a historic steel industry site, which we aim to guide toward a sustainable future through a consistent focus on the green transition.”

The agreement ends a shared ownership structure that involved thyssenkrupp Steel and Vallourec. Marie Jaroni, CEO of thyssenkrupp Steel Europe AG, called the deal “an important milestone for everyone involved.” She said it allows thyssenkrupp to “consistently implement our strategic realignment: By concentrating production in northern Duisburg, we are sustainably raising capacity utilization, efficiency, and profitability.” The supply contract between HKM and thyssenkrupp Steel, originally set to run until the end of 2032, will now expire at the end of 2028.

Philippe Guillemont, CEO of Vallourec S.A., said the sale supports his company’s strategy of focusing on its core tubular products. “Vallourec had previously announced its intention to sell its minority stake in HKM in order to pursue a strategy focused on Vallourec's core business and key markets. We therefore welcome the agreement announced today by Salzgitter, which fully supports this goal, while at the same time, opening up new opportunities for HKM in the production of low-emission steel.”

The restructuring process is expected to run through 2028. HR chief Birgit Dietze said the cuts are “a difficult but necessary step” and that “the transformation can only succeed if employees and managers work together.” Dialogue with employee representatives remains central, she said.