User:Dr Gangrene/steel tr

During the 1960s and until the first oil shock in 1973, Luxembourg's economic growth and prosperity were primarily driven by the steel industry. Following the steel crisis in 1975, the financial sector took over. Consequently, the share of the GDP generated by the steel industry dropped from about 30% in 1960 to approximately 12% in 1980, reaching barely 2% in 2011. Today, its significance for Luxembourg's economic growth and employment has significantly diminished.

In the second half of the 20th century, the Luxembourgish steel industry witnessed the closure of the last active mines, a ten-year steel crisis (1975-1985), accompanied by profound restructuring in terms of employment, technologies, production capacities, and institutional repercussions. Acquisition and merger movements followed, leading to the creation of the ArcelorMittal group in 2006. In 2011, this group became the world's leading steel producer with an output of approximately 100 million tonnes.

Mines and iron ore
Iron ore is the foundation of iron and steel production. In 1960, there were still 24 iron mines in total, including 16 open-pit operations and 8 underground galleries. At that time, Luxembourg's production of iron ore amounted to 7 million tonnes, with 17% exported.

In 1960, the mining industry employed 2,100 workers, of which 77% were Luxembourgers, 13% Italians, 4% Belgians, 1% Germans, and 3% had other nationalities.

By the mid-1960s, many galleries were closed, and iron ore extraction shifted towards open-pit mines, allowing the use of more cost-effective modern equipment. The average yield per worker increased to a historical peak of 5,224 tonnes in 1969, while the number of employed workers consistently decreased.

Simultaneously, indigenous iron ore production continuously decreased, and in 1979, exports were permanently halted. As raw iron ore from Luxembourg was relatively poor in iron content (around 30%, hence the name 'minette'), the steel industry turned to 'rich' ore from France (especially Lorraine, where the Luxembourgish steel industry owned mines), Brazil, and Sweden. In 1960, the Luxembourgish steel industry still consumed 12.8 million tonnes of raw ore. Over the review period, the share of indigenous ore consumed by the Luxembourgish steel industry steadily declined, averaging 46% in 1960, 39% in 1970, 18% in 1975, and 6% in 1980. Indigenous extraction was finally suspended on November 27, 1981, with the closure of the last iron ore mine in Luxembourg, employing around 170 workers at that time. Over these two decades, 21 workers lost their lives, and 183 were injured.

Pig iron production and transformation into steel
With the closure of the last mining operation in Luxembourg on November 27, 1981 (Thillenberg in Differdange), iron ore supply relied on imports until October 1997.

The record consumption of iron ore in 1974, reaching 15.1 million tonnes in blast furnaces, naturally led to a record pig iron production of 5.5 million tonnes.

After its peak in 1974, pig iron production dropped by over a third in two years, from 5.5 million tonnes to 3.6 million tonnes in 1977. Steel production experienced a similar decline from a historical peak of 6.5 million tonnes to 4.3 million tonnes over the same period. Although less abrupt, this trend generalized over the longer term and had massive repercussions on the Luxembourgish economy. In 1974, the steel industry's relative share of the GDP was 25%. Its importance in employment was 16%, and metal exports represented 70% of the total goods exports. The subsequent years were marked by a crisis that shook the steel industry, showing that the difficulties (high energy prices, global overproduction, and a decline in global steel demand) became increasingly structural in Luxembourg. In 1974, the steel industry still employed 25,000 workers. By 1985, there were only 13,400, and in 2010, approximately 6,000 employees worked in the steel industry. Steel production decreased from 6.5 million tonnes in 1974 to 3.7 million tonnes in 1990, averaging a reduction of 3.5% per year. In 1990, the steel industry's relative share of the GDP was only 11% and barely reached 2% in 2011. In 1990, steel employment represented nearly 6% of total employment. In 2010, it accounted for only 2% of total employment.

Restructuring and modernisation years
The crisis years (1975-1985) gave birth, in 1977, to the 'Luxembourg model' with the Tripartite Coordination Committee, composed of the Luxembourgish government, employers, and steel industry unions. A restructuring and recovery program affecting employment, production capacities, and personnel was developed. Instruments such as the Anti-Crisis Division (DAC), extraordinary public works, optional early retirement for steel industry employees, and an unemployment fund were created to prevent layoffs, ensure employment retention, and mitigate unemployment.

In 1993, the decision was made to focus steel production on the electric arc furnace process, marking the end of the LDAC process. The first electric arc furnace in Esch-Schifflange began production in 1994. The last blast furnace in Luxembourg was closed on 28 August 1997, putting an end to pig iron production and iron ore imports, entirely replaced by the 'electric furnaces' process with scrap as the basic raw material.

Unfortunately, modernization and rationalization efforts could not ensure the competitiveness of the Luxembourgish steel industry globally. In fact, the Luxembourgish steel industry never fully recovered from the effects of the global economic crisis from 1975 to 1985, closely linked to the two oil shocks. Confronted with significant overcapacities and suffering from the lack of competitiveness of local iron ore, the steel industry had to restructure and significantly reduce its production capacity and workforce.

Initially, only three modern electric arc furnaces remained: those in Esch-Schifflange, Differdange, and Esch-Belval, until the Schifflange furnace closed its doors in early 2013.

Luxembourg's position in global steel production
Since the first global steel crisis, indigenous steel production did not evolve at the same rate as global production. While global production experienced an average annual growth rate of 2% during the period from 1974 to 2010, the Luxembourgish steel industry contracted an average of 2.6% per year, and the significance of Luxembourgish steel production relative to global production decreased over time.

The Western world lost importance in steel production, while rapid development was observed in BRIC countries (Brazil, Russia, India, and China). Between 1974 and 2010, Brazil's steel production displayed an average annual growth rate of 4.2%. In India, the rate was 6.5%, and China's steel production increased at an average of 9.3% per year.

Even beyond the steel crisis of 1975-1985, the Luxembourgish steel sector was forced to adapt to a changing market. Ultimately, this led to the merger of Aceralia (Spanish), ARBED, and Usinor (French) into one entity: Arcelor (February 18, 2002), with its headquarters remaining in Luxembourg. After this merger, the group became the world's leading producer for just three years before being surpassed by Mittal Steel Company in 2005. On January 27, 2006, the latter launched an €18.6 billion hostile takeover bid for Arcelor, which was rejected. On May 18, 2006, the hostile bid was officially announced on the stock markets. To counter the hostile bid, Arcelor announced a merger with the Russian company Severstal. However, on June 2, 2006, the European Commission gave its conditional approval for Mittal Steel Company's acquisition of Arcelor, and after some legal wrangling, Mittal Steel Company transformed its hostile takeover bid into a non-hostile bid, which Arcelor accepted on June 25, 2006, for €25.4 billion. The new entity, named ArcelorMittal, is now by far the world's leading steel producer, producing around 97 million tonnes of crude steel in 2011, accounting for 6.5% of global production.