A new JV in Brazil on its way

A new JV in Brazil on its way

European steel producer Arcelor, China's largest steel maker Baosteel and Brazil's iron ore giant Companhia Vale do Rio Doce SA (CVRD)are planning to go into a venture to establish a steel plant to produce 3.7 million tons of steel slabs annually. The cost and further details of the project are not yet disclosed however it is known that the mill would be located in the northeastern state of Maranhao. Baosteel and CVRD have already signed agreements to asseint venture. This agreement is seen as Chinese Baosteel's largest-ever foreign direct investment venture abroad. It is stated that necessary approvals have also been obtained from the Chinese government with this purpose. The project includes establishing a joint venture to build and operate an integrated steel plant in Sao Luis, Maranhao, Brazil. It also involves the possibility of expanding the capacity to reach an annual production of 7.5 million tons. According to press reports the cost would be around $1.5 billion and the production could be expected to start in late 2007 or in 2008. CVRD and Arcelor already jointly control Brazil's biggest maker of steel slabs, Companhia Siderurgica de Tubarao. CST sold 4.65 million tons of steel in 2002 and is planning to add a third blast furnace that would lift output to about 7.5 million tons of steel per year in 2006. CVRD is the world's biggest iron ore exporter and through this project demand for its iron ore products are expected to further increase. CVRD said in a statement that it mined a record-setting 186 million tons of iron ore in 2003 and plans to invest $1.82 billion this year to raise output another 73 million tons in coming years.