Panic in the Steel Sector - Geopolitical Dependencies Threaten Production: Strategic Resources, ArcelorMittal, and thyssenkrupp in Focus

ArcelorMittal Secures Raw Materials for Its Own Transformation

Steel producer ArcelorMittal is attempting to mitigate the looming shortages of raw materials through aggressive vertical integration. The company relies on a diversified business model that links steel production to its own mining operations to protect itself against price fluctuations in spot markets. Nevertheless, the commissioning of the new electric arc furnace at the Calvert plant in the US, which has an annual capacity of 1.5 million tons, alone requires immense additional quantities of high-purity iron.

To secure the massive raw material requirements of the new furnaces, the group has acquired several scrap recycling companies in recent years. The first quarter of 2026 was profitable for ArcelorMittal, with an operating profit of USD 753 million and a net profit of USD 575 million. However, high investments of USD 1.3 billion led to a significant increase in net debt to USD 9.3 billion. This debt burden illustrates how capital-intensive the transition to green steel is and how great the pressure is to secure resources in the future as well.

thyssenkrupp: Restructuring and High Pressure for Impairment Charges in the Steel Business

The long-established German conglomerate thyssenkrupp is facing considerable resistance as part of its realignment. Management aims to transform the highly diversified industrial group into a pure financial holding company to enable individual segments, such as Steel Europe or Marine Systems, to operate independently. However, the sluggish state of the European core market is weighing heavily on the group's profitability.

The Steel Europe division, which is under extreme pressure to transform, recorded massive impairment charges in the 2024/2025 fiscal year. On the stock market, this crisis is reflected in a massive valuation discount—the stock currently has a market capitalization of only around EUR 6.6 billion. To close the difficult-to-recover technological gap versus competitors such as ArcelorMittal, thyssenkrupp urgently requires access to high-purity iron ore pellets.

Strategic Resources as a Response to the Raw Materials Shortage

This is precisely the bottleneck that the Canadian development company Strategic Resources aims to resolve. The business model is based on a fully integrated industrial value chain for the extraction and processing of vanadium, high-purity iron, and titanium. At its heart is the BlackRock project in the Lac-Doré complex in the Canadian province of Quebec, which is 100% owned by the group. A feasibility study confirms the project's outstanding economic metrics over a 39-year lifespan.

Official reserves for the open-pit mining operation total 127.8 million tons of ore with an average in-situ grade of 0.46% vanadium pentoxide and 40.2% iron oxide. The development plan from 2022 anticipates an average annual production of 526,000 tons of high-purity pig iron and 4,400 tons of ferrovanadium once Phase 3 is fully operational. Partly due to extremely low energy costs thanks to hydropower, the all-in sustaining costs (AISC) after by-product credits amount to a competitive USD 306 per ton of pig iron, which already makes the project appear extremely robust economically.

Global Alliances, European Wild Cards, and Strong Shareholder Structures

To address the significant capital requirements, Strategic is currently pushing forward with Phase 1, which involves the construction of an iron ore pellet plant with an annual capacity of 4 million tons at the deep-water port of Port Saguenay. To finance preliminary work, the company recently initiated a LIFE capital increase to raise CAD 10 million. An agreement with Tacora Resources is intended to secure raw materials for the first phase, including the supply of high-grade iron ore from the Scully Mine. In addition to the BlackRock project, Strategic Resources holds a European wild card in the form of the Mustavaara project in Finland, which, according to a preliminary economic feasibility study, contains an additional 103.7 million tons of magnetite ore in the measured and indicated categories.

According to data from the United States Geological Survey, of the 110,000 metric tons of vanadium mined worldwide, 82,000 metric tons come from China alone. As the transformation of industry giants ArcelorMittal and thyssenkrupp threatens to fail without pure pig iron, Strategic Resources is moving into the spotlight. Since the company has already signed off-take agreements and announced in April that it is working with Tyfast Energy to advance a closed-loop North American supply chain for battery-grade vanadium oxide, investors should keep an eye on Strategic Resources.