COPENHAGEN, April 2 (Reuters) - Swedish steelmaker SSAB (SSABa.ST) , opens new tab will invest 4.5 billion euros ($4.83 billion) in building a fossil-free mini-mill in Lulea, Sweden, the company said on Tuesday.

When the new mill is completed, SSAB will close the current blast furnace-based production system which would enable a 7% reduction of Sweden's total CO2 emissions, the company said in a statement.

Start-up of the mill, which will have an annual capacity of 2.5 million tonnes, is expected by the end of 2028 with full capacity one year later, it added.

The company estimated the yearly improvement on earnings before interest, tax, depreciation and amortisation (EBITDA) would be more than 5 billion Swedish crowns ($463 million) at the current commodity price forecasts.

"The new mini-mill will have a better cost position with lower fixed costs, higher efficiency, shorter lead times and eliminated CO2 costs," SSAB said.

SSAB last year said it aims to boost its annual profit by at least 10 billion crowns from 2030 onwards as it shifts to carbon-free metals production.

The company's transformation of its Oxelosund mill to cut emissions was proceeding as planned, SSAB said.

The timing of a similar planned transformation of its Raahe steel mill in Finland will depend on the company's financing and execution capacity, as well as the learnings from the Lulea project, the group said.

($1 = 0.9320 euros)

($1 = 10.7991 Swedish crowns)

(This story has been corrected to remove the extraneous word 'mln' from the headline)

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https://www.reuters.com/sustainability/swedens-ssab-invest-48-bln-mln-fossil-free-steel-mill-2024-04-02/