ArcelorMittal, the world's largest integrated metals and mining company, and Chinese steel producer Hunan Valin Steel Group Co., Ltd have signed a joint venture agreement for the production and sales of electrical (silicon) steel.
The new JV, named Valin ArcelorMittal Electrical Steel Co., Ltd, and the Auto Sheet JV established by the companies in June, both constitute steps forward in the realization of the framework agreement signed by Valin and ArcelorMittal in November last year.
The new JV has a registered capital of RMB 2.6 billion (approx. $379.08 million), each party retaining 50 percent of shares. A total investment estimated at RMB 6.5 billion (approx. $947.7 million) will be made in order to reach annual production capacities of 400,000 mt of non-grain oriented (NGO) steel and 200,000 mt of grain oriented (GO) steel.
Moreover, in order to produce the latest generation and highest performance electrical steel grades in China, ArcelorMittal will transfer to the new JV its latest NGO and GO technologies, while its R&D centers in Brazil and Europe will continue product improvement and will develop new, higher performance grain oriented grades.
Commenting on the agreement, ArcelorMittal group management board member Mr. Gonzalo Urquijo stated, "It is a significant step forward in ArcelorMittal's strategy for supplying the market worldwide with high quality electrical steels. ArcelorMittal has recently decided expansions in its European and Brazilian operations and considers this market as strategic, considering the strong demand linked to the increasing need for electricity distribution and consumption in performing applications."
Valin ArcelorMittal Electrical Steel Co., Ltd is scheduled to start production in 2010.