JFE Steel and Mitsui to produce silicomanganese in China

JFE Steel and Mitsui to produce silicomanganese in China

Japanese steelmaker JFE Steel and Japanese trading firm Mitsui & Co., along with Erdos Manganese Alloys Co., a subsidiary of Erdos Cashmere Group announced that they have agreed to establish a joint venture to construct a plant in China's Inner Mongolia region with an annual capacity of 150'000 tons of silicomanganese, which will be one of the largest plants in China. The construction of the plant is expected to begin in October 2004, with production expected to begin in summer 2005. Construction of the plant is expected to cost around $40 million. Erdos Group will have a 51% stake in the joint venture, while JFE Steel and Mitsui will each hold a 24.5% stake in the venture. The plant will have 4 electric arc furnaces, each with power of 25'000 kilovolt-amperes. The plant will export around 100'000 tons of products to Japan and the remaining 50'000 tons will be sold in other Far East countries, especially China. According to officials from JFE Steel, this joint venture will allow the producer to stabilize the supply of silicomanganese which has seen volatile prices due to the high global demand, especially from China and will enable the company to satisfy nearly all of its requirements for the raw material.