AHMSA mining unit receives court protection against creditors

The steel company Altos Hornos de México (AHMSA) said on Tuesday that its mining subsidiary received bankruptcy protection, which will allow it to suspend payment of obligations, after its business was affected by the cancellation of contracts with the state electricity company. CFE.

Since mid-2020, the firm warned of the financial impact that CFE’s decision to terminate the coal supply contracts for two of its thermoelectric plants in the north of the country represented for its Minera del Norte unit.

Altos Hornos de México, AHMSA, announced in October 2021 that it was studying filing its subsidiary under Chapter 11 of the US Bankruptcy Law.

In June 2020, the CFE informed Minera del Norte, through its trading company Corporativo Industrial Coahuila, of the cancellation of the coal supply contracts for the José López Portillo and Carbón II thermoelectric plants, located in Nava, Coahuila.

“This decision will lead Minera del Norte to liquidate the staff of the MICARE Unit, which includes 2,000 workers and employees in Mexico, and 400 in Texas, from its company Dos Repúblicas Coal Partnership, mainly Mexican residents, in addition to affect 5,000 workers from companies that provide different goods and services,” AHMSA warned at the time.

He recalled that the supply contracts for these plants were renewed through public tenders for 27 years, in which both plants, based on fuel generated in Mexico, remained among the most efficient in the country.

“The forced closure of operations of the MICARE Unit and Dos Repúblicas represents the loss of a minimum of 250 million dollars in state-of-the-art mining equipment, civil works and ecological rehabilitation works, an investment that the company made to guarantee compliance with the terms agreed in an international tender”.