The launch of blast furnaces in the Czech Ostrava is in jeopardy due to disputes with the energy supplier

Tameh Czech, the sole electricity supplier to Liberty Ostrava, the largest Czech smelter, is shutting down because it has no money to buy coal due to non-payments by Liberty.

Tameh says it owes debt to Liberty is CZK 2 billion (EUR 81.8 million) and that she also has unpaid bills totaling over CZK 1.2 billion. Liberty Ostrava is the plant's only customer and its non-payments have left Tameh in a catastrophic financial position, depleting all potential reserves and resulting in Tameh being unable to purchase any more coal.

“Tameh has no choice but how to close the plant this week and use all available legal measures to hold Liberty solely responsible for its reckless behavior,” the company said.

A Liberty Ostrava spokesman said the company was “disappointed by this one-sided threat.” . and that Liberty offered to provide Tama with coal while the “negotiations” continued.

When Liberty agreed to buy Ostrava from ArcelorMittal along with a number of other assets, it was also prepared to acquire Tameh, but this deal was not completed. Tameh is 50% owned by ArcelorMittal, which was seeking a €140 million payment from Liberty in connection with the wider acquisition.

Argus understands the Tameh-Ostrava contract was a fixed fee for energy supplies. Liberty has complained about the high prices it is paying Tameh for this contract - Liberty received government support of CZK 661.77 million to "reduce these prices," Tameh said in a letter.

Late last month " Liberty announced a 30-day moratorium against Tameh Czech. As part of its defense, the company must submit a restructuring plan to the court, although industry sources expect it will ask for an extension.

The plan involves a “temporary” shutdown of production where demand is low, such as for wire rod, and also involves a review of coke production activities, since the price of market coke is almost equal to the price of coking coal.

Tameh Czech supplies all heat and electricity to Ostrava, so its shutdown means Liberty will not be able to restart blast furnaces or operate coke ovens ovens. Ostrava can produce 3.6 million tonnes a year and said yesterday it would restart its blast furnace in January.

Liberty said it would use "opportunistic acquisitions of low-cost" companies. importing semi-finished products to feed its rolling lines as part of a restructuring plan. It already imports Russian steel semi-finished products, financed by traders, for rolling at EU assets.