September 22, 2016 / 8:01 PM / 3 years ago

Order blocking permit for ThyssenKrupp Brazil mill lifted

RIO DE JANEIRO (Reuters) - A Brazilian judge on Thursday lifted an injunction blocking Rio de Janeiro from granting an operating license for ThyssenKrupp AG’s Cia Siderurgica do Atlantico steel mill, saying there were no irregularities in the 11-year permit process.

The new logo of ThyssenKrupp is seen at the headquarters of the steel maker and multinational conglomerate in Essen, Germany, April 20, 2016. REUTERS/Wolfgang Rattay/File Photo

The ruling by Judge Natascha Maculan Adum Dazzi of the Rio de Janeiro-state Justice Tribunal reversed the injunction she granted Tuesday, according to a copy of the ruling provided by ThyssenKrupp.

On Tuesday, Dazzi prohibited the state government from granting the CSA steel mill a permanent operating license. The mill has been operating on provisional licenses since it began producing steel in 2010.

The injunction was issued to give courts time to evaluate other legal requests seeking new studies on the environmental and health impact before the license is issued, said prosecutors, who requested the injunction in July.

In her ruling, Dazzi said her examination of the case led her to conclude that there were no irregularities in the licensing process by the Rio de Janeiro-state environmental protection agency INEA.

“ThyssenKrupp fully complies with the license conditions established by the state environmental authorities,” the company said earlier on Thursday. “State environmental protection agency INEA is ready to approve the operating license as soon as there is a final decision by the courts.”

The 5-million-tonne-a-year Cia Siderurgica do Atlantico has been plagued by problems since it was built. Planned during Brazil’s commodities boom, it opened after construction problems and delays, only to be hit by a global glut of steel.

Nearby residents in the suburbs of the City of Rio de Janeiro were bothered by dust, soot and particulate problems that plagued the mill in its early years. This led to fines and court-ordered shutdowns. Residents complained of problems ranging from respiratory woes to contaminated water.

Such complaints led to Cia Siderurgica do Atlantico signing an adjustment of conduct accord. The judge said prosecutors who sought her original injunction are aware of the mill’s compliance with its obligations under the accord.

The 5.3-billion-euro ($5.9-billion) mill, at the time Brazil’s biggest foreign investment ever, became a loss maker for ThyssenKrupp, which tried to sell it but received no acceptable offers.

This year, Vale SA, which owned 27 percent of the mill and had a long-term iron-ore supply contract, sold its stake to ThyssenKrupp for a “token” amount.

($1=$1.1191 euros)

Reporting by Jeb Blount; Editing by Chizu Nomiyama and Leslie Adler

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