Posco, South Korea's largest steel producer and one of the world's biggest steelmakers signed a Memorandum of Agreement (MoA) with the world's largest iron-ore mining company Vale and South Korea-based Dongkuk Steel Mill Co. Thursday, therefore joining a planned mill venture in Brazil in Companhia Siderúrgica do Pecém (CSP).
The next steps will be the negotiation and signing of a Shareholder Agreement, expected for the beginning of next year. In July, the South Korean company announced its intention to join Vale and Dongkuk in the CSP steel mill project, which is being built at the Pecém Industrial and Port Complex (CIPP) in the state of Ceará, Brazil. The new CSP shareholders participation will be, approximately, Vale 50 percent, Dongkuk 30 percent and Posco 20 percent.
Posco's participation is strategic in terms of developing the CSP project. "The entry of this new partner will add even more value, as we will be supported by Posco's technology and operational experience in major integrated steel mills," said Aristides Corbellini, director of Vale's steel business.
CSP will be an integrated mill capable of producing 3 million tons of steel slabs for the export market, and this figure may reach 6 million tons in a second phase. Implementation began on 16 December 2009 and earthmoving activities are currently proceeding. The steel mill is due to be operating in 2014.
The project will help the country's steel industry to continue growing, while adding value to iron ore and generating wealth and development for the state of Ceará and the rest of Brazil. The state was chosen due to its logistics facilities and its strategic location close to export markets.
In the first stage of construction work, the project is expected to create more than 15,000 direct jobs. When the steel mill is operational, 4,000 direct jobs will be generated.