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DOCUMENTS "COM"
COM(82)53
Vol.1982/0018

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COMMISSION
OFTHE
EUROPEAN COMMUNITIES
Genera!SecretariatCOM(82)53 final
Brussels,16February1982
FOROFFICIALUSEONLY
COMMUNICATION FROMTHECOMMISSION TOTHECOUNCIL
RequestforapprovalbytheCouncil,inaccordance withthesecond
paragraphofArticle54oftheECSCTreaty,forthepart-financing
ofaprojectofHellenicFerroalloys S.A.,Volos,Greece,concern­
ingtheminingandenrichmentofchromiteandtheprocessingof
ferrochromium
C0MC82)53final

ForOfficiaiUseOnly
NotetotheCouncil
Subject:RequestforapprovalbytheCouncil,inaccordancewiththe
secondparagraphofArticle54oftheECSCTreaty,forthe
part-financing ofaprojectofHellenicFerroalloys S.A.,
Volos,Greece,concerningtherainingandenrichmentof
chromiteandtheprocessingofferrochromium .
HellenicFerroalloys hasrequestedtheCommissionoftheEuropean
Communitiestograntalong-termloanofIJS$10million(approx.9.45 mECU)
forthepart-financing oftheaboveproject.
ThecompanywassetupinNovember1979withtheaimofintensifying
chroniteuininginnorthernGreeceandofembarkingonferrochromium
processing .
The-parentcompany,theHellenicIndustrialandMiningInvestment
Company(HIMIC)S.A.,isthemainshareholderwith96%ofcapitalresources,
whichamountto800millionDra.Theremaining 4%isdividedequally
amongfourGreekbanks,whicharealsoshareholders ofHIMICS.A.Theseare
(percentageshareholding inKIMICgiveninbrackets):
-NationalBankofGreece (37.5%)
-HellenicIndustrialDevelopment Bank(37.5%)
-NationalMortgageBankofGreece (20.0%)
-NationalInvestment Bankfor
IndustrialDevelopment (5.0%)
HIMICwasset-upinDecember1975attheinitiativeoftheGreek
Governmentandwiththehelpofthefourbanks,allofwhicharestate-
ownedorcontrolled,withtheaimofexploiting -andmarketingthe
country'smineralresourcesandofestablishing anumberofbasicindustries .
Thus,beforetheestablishment ofHellenicFerroalloys ,MessolongiSalt
WorksS.A.wassetupin1978.,whileGreekPetrochemicals S.A.wasset
upatthestartof1931.

Description ofProject
Theainofthecompanyistominechromite,enrichitinatsown
worksandprocessittoferrochromiun .Inkeepingwiththecorspany's
integratedstructure,theprojectcomprisestheconstruction ofaprocessing
worksatAlmyros(nearVolosontheeastcoastofGreece),theconstruction
ofanewenrichmentplantandtheextensionoftheninesinVourinon,
northernGreece.
Intensiveprospectingmrecentyearshasledtothediscoveryof
newchromiteoredeposits.Depositsarecurrentlyestimatedasfollows
(in1000t):
OresEnriched
-certain 3000 750
-probable 3200 800
-possible 1800450
Withtheplannedextensionoftheninesandtheacquisition ofadditional
plantthecurrentyearlyfigureofapprox.60000tofchroniteshouldincrease
to240000t.Thenewenrichmentplantshouldhaveacapacityof60000
t/year.Thecertainchromiteoresdiscoveredsofarwillthuslastfora
goodtwelve'years.Thechromiteoreshaveachromiumoxide(CE^O^)content
of18-20%,whiletheconcentrates haveacontentof52%,withachrouiumto
ironratioof3.1:1.
Theferrochromiuci workswillbeconstructed bytheFinnishconpany
Oytokunpu OY,whichhascompletedthenecessarystudiesandwillbe
supplyingtheinstallations .Itwillhaveacapacityof30000t/year
(thiscouldbeincreasedto40000t/year).Theendproductwillbe
ferrochroraiun withachroraiuncontentof68%,andahighcarboncontent.
Inrecentyearsthistypehaslargelyreplacedthelow-carbontypesbecause
ofthepossibility ofproducingcrudesteelwithalowcarboncontentand
oftheincreasinguseofAOD(argon-oxygen decarburization )converters .
Theinstallations willbedesignedinaccordancewithenvironmental
protectionandenergyconservationcriteria.
Theprocessinvolvestheuseofasealedfurnacewithpreheatedcharge.,
whichperaitsareductioninenergyconsumptiontoapprox.3000KWh
pertonneofferrochromium(coraparedwith4000KWhpertonneFeC-rusingother
nethods),whichmakestheprojectnuchmoreeconomical .Despitethe
recessionontheworldmarketsandinparticularthecrisisfacingthe
Europeansteelindustry,bothofwhichhavecausedferrochroniui iprices
topiunmet,thepricesobtainableatpresent(approx.42c/lb,i.e.
940-p/t)arehighenoughconparedwiththeestimatedproductioncosts
ofapprox.580$/ttopermitredemptionoftheoutlaywithinabout6%years.
4011/81en

-3-
Assessment
Thenine Community countries (excluding Greece )have nochromium-bearing
ores andaretherefore entirely dependent onimports from non-member
countries .Imports cone mainly fro .aonecountry ..South Africa ,which
accounted for46.o%ofchromium iwports in1977 and43.4% in1973 (measured
interms ofmetal content ).
Overall chromium consumption naybebroken down bysector roughly as
follows :
70%metallurgical industries (mainly stainless steel )
10%chenu cal indus try
20%fireproof bricks
Inthemetallurgical industries chromium isused mainly intheform of
ferro-chroiaiurn.
In1978 theEuropean steel industry consumed 500000 tofferro -
chromiuiQ ,381OOOt ofwhich wasimported from non-member countries ,
while Community production inthesame year amounted to134000 t.
TheCommunity isheavily dependent onimports from South Africa ,asis
evident from thefollowing figures (both for1978 ):South Africa supplied
49.4% oftheores andconcentrates processed intheCommunity .The
Community imports 39.5% ofitsferrochromium from South Africa ,which is
byfartheCommunity 'sbiggest supplier .Because ofSouth Africa 's
dominant position ontheworld chromium irarket andtheresultant -indeed ,
increasing -dependence oftheEuropean steel industry onthat country .,
the^rrochromiun project inGreece should bepromoted inorder todiversify
forces ofsupply -notleast forpolitical reasons .When theinstallations
arecomplete andproduction begins ,asisscheduled for thestart of1933 ,
this project will betheonly integrated ferrochroniura works (with itsown
rawmaterials )intheComiaunity .
Greece 'sproduction offerrochroi tium (30000 t/year ?with thepossibility
ofanincrease to40000 t/year )isintended first andforenost forthe
Cormunity steel industry .This isanodes tthough notinsignificant
contribution totheregular andguaranteed supplies of .chromium ,an
important alloy component ,toCounuinity special steel producers .Moreover ,
because oftherelative proximity ofproduction site andprocessing works ,
transport costs should belower andthus help toreduce theprice of
supplies fortheEuropean steel industry ;theproject should therefore
contribute directly toachieving theaims ofthesecond paragraph of
Article 54oftheECSC Treaty .
Theproject isfurthermore animportant component ofinvestment in
therawmaterials sector ,which isofgreat importance totheGreek economy .
Thepart-financing oftheferrochromium project will thus contribute towards
thecountry 'sgeneral economic development .
TheCommission hasapproved theloan inprinciple .Inaccordance with
thesecond paragraph ofArt .54oftheECSC Treaty ittherefore requests
theCouncil toapprove thegranting ofaloan ofUS$ 10million to
Hellenic Ferroalloys ,Velos ,Greece .
4011 /81en