On December 18, Taiwan's largest steelmaker China Steel Corp. announced that its board of directors has approved the decision to buy a 0.5 percent stake in Brazilian iron ore producer Namisa SA from Sumitomo Metal Industries and another 0.5 percent in Namisa from Itochu Corp, at a total cost of JPY8.5 billion ($94.17 million), according to reports.
With this move, China Steel seeks to secure overseas iron ore supplies amid expectations that a global recovery will eventually ratchet up demand.
The iron ore project in question is estimated to have a proven reserve of 1.4 billion metric tons. Brazil's Companhia Siderurgica Nacional (CSN) owns a 60 percent stake in Namisa, while other shareholders include Nippon Steel Corp., JFE Steel Corp., Kobe Steel Ltd and Nisshin Steel Corp., all from Japan, as well as South Korea-based steelmaker POSCO.
China Steel, which imports 16 million metric tons of iron ore every year with 71 percent of imports from Australia and about 25 percent from Brazil, expects Namisa to supply 300,000 metric tons of iron ore annually in the initial phase of the investment, while the supply is expected to reach 500,000 metric tons per year in the long term.
The investment deal will be offered to Namisa's shareholders and regulators from Taiwan and Brazil for the necessary approvals.