Brazilian steel company Companhia Ipatinguense de Laminação (Cipalam) plans to invest BRL 300 million ($57 million) to set up a steel mill, as the company doesn’t yet produce steel, according to a media report by Diario do Comercio.
Currently, the Minas Gerais state-based company buys slabs and billets from third party companies to roll them into bars and profiles. The media report noted the investment would take place in the next three years, and would involve the construction of a steelworks area so the company can produce its own materials out of scrap.
Cipalam has a 20,000 mt/year capacity to produce bars and finished profiles, however, the company hasn’t been able to reach its full capacity due to lack of raw materials, said Flaviano Gaggiato, president of a local industry trade group, known as FIEMG Regional Vale do Aço.
To obtain a permit to produce its own steel, Cipalam would need to adapt its business to other environmental, energy, fiscal and tax regulations. Neither the company nor FIEMG have provided a specific timeline for the company to advance its steel mill project.