Liberty Ostrava says it has proposed solutions to its energy supplier Tameh Czech to ensure a sustainable future for both companies, after Tameh filed for insolvency at an Ostrava court on Thursday.

This included an offer to “provide Tameh with the coal and services it needs to keep the plant working so that its actions do not damage the sustainable future of our business or impact the health and safety of our employees and the local neighbourhoods which depend on us for heating,” a Liberty Ostrava spokesperson tells Kallanish. “We will continue to engage with Tameh over the coming days."

Tameh Czech’s insolvency is the result of its only customer, Liberty Ostrava, not settling its debts with the energy provider, meaning it cannot continue operating, according to a note from Tauron, the joint venture partner of parent company Tameh Holding. Lack of funds to purchase coal supplies for power generation is the reason behind the inability to operate, Czech media report.

The steelmaker said late last month a Czech court had granted it a specific creditor moratorium against its energy supplier, enabling it to execute its restructuring plan which involves restarting blast furnace no.3 (see Kallanish passim).

On Wednesday, a day before the insolvency filing, Liberty Ostrava said it will restart and ramp up BF3 from January as part of a new operational model. This will also involve suspending production of less-demanded products, such as wire rod, and focusing on high-value-added and demanded products such as road barriers, mine supports and threaded bars, the steelmaker says.

The new model will see Ostrava conduct “opportunistic” acquisition of low-cost, semi-finished steel imports for conversion at its downstream rolling facilities, the producer continues. The firm will also consider the future of its coke operations. “The European market is suffering from serious issues of over-supply which means that it is currently significantly cheaper to buy coke from the open market than produce it at Ostrava,” it says.

In September, the firm began the closure of its VKB 11 coke oven, one of three at the works.

The Ostrava optimisation process is being led by Theuns Victor, executive director of Liberty's Chaiman’s Industrial Projects Office and a veteran of Liberty’s Australian operations.

“Our goal will then be to deliver that plan as quickly as we can in the New Year, including restarting blast furnace no.3 and the steel shop, ensuring that we reduce the understandable concerns of our highly committed employees, our valued customers and suppliers as well as the local communities which depend on our businesses,” Liberty European president Ajay Aggarwal said in the Wednesday announcement.