Vale is considering leaving ThyssenKrupp’s JV mill, as the Brazilian iron ore producer is seeking to focus its activities in the mining segment, a media report said on Friday.
Vale is said to be preparing a proposal to leave the mill it co-owns with Companhia Siderurgica do Atlantico or TKCSA, which recently supplied slabs for Brazil’s Usiminas.
Citing anonymous sources, a media report said Vale could sell its 26.87 percent stake in the JV owned company for $1, at the same time it’d agree to assume 10 percent of TKCSA’s contingent liabilities.
A media report noted that TKCSA reported EUR 2.6 billion in total liabilities at the end of the fiscal year of 2015. Another media report said TKCSA has been struggling for six years to obtain an environment license, despite operating with negative margins.
TKCSA has been operating under a conduct adjustment commitment term (TAC), in which the steelmaker is expected to meet a series of obligations. The TAC, which works as a provisional license, expires in April 16 this year.
Both Vale and TKCSA were said to have tried to unsuccessfully sell the mill in recent years.