Thyssenkrupp's steel division on Thursday said a planned direct reduction site to produce carbon-free steel, which is so far expected to cost around 3 billion euros ($3.3 billion), could be more expensive than previously thought.

Thyssenkrupp Steel Europe (TKSE), Thyssenkrupp's steel unit in which Czech billionaire Daniel Kretinsky owns a 20% stake, said it currently assumed that the plant could start operations in 2027.

TKSE said its management board had informed its parent Thyssenkrupp AG "about possible risks and resulting potential cost increases in the construction of the direct reduction plant at the Duisburg site".

The comments come as Thyssenkrupp AG's supervisory board gathers for a scheduled meeting, the first since TKSE's leadership resigned at the end of August in what is seen as an escalating crisis at the German industrial icon.

Under current plans, two thirds of the plant's funding is coming out of public hands -- the German government and the regional state of North Rhine-Westphalia where Thyssenkrupp is based -- while the company is covering the rest.

($1 = 0.9074 euros)