On December 16, Brazilian mining company Vale and South Korea's third largest steelmaker Dongkuk announced the start of construction work at Companhia Siderúrgica do Pecém (CSP), the first integrated steel mill featuring a coking plant in Brazil's northeast region.
The project, located at Pecém Industrial and Port Complex (CIPP) in São Gonçalo do Amarante, Ceará State, will generate more than 15,000 jobs during the construction phase. CSP is due to come on stream in 2013, with an estimated annual output of 3 million mt of steel plates in the first phase, which may later be expanded to 6 million mt in a second phase. In addition to steel plates, CSP will also produce electricity for its own use, with surplus power sold on the domestic market.
According to the statement issued by Vale, CSP is one of the most important private sector projects in the northeast and one of the biggest in Brazil. It is part of Vale's strategy to encourage new steel projects in Brazil, which has one of the lowest production costs of any country in the world, by means of temporarily holding minority stakes in order to become the exclusive iron ore and pellet supplier.
In addition, the project will promote the country's steelmaking industry, adding value to ore and generating wealth and development for Brazil and the state of Ceará. Around $4 billion will be invested in CSP in the first phase. Ceará was chosen because of its logistical infrastructure and favorable strategic location for the export market. Furthermore, the project's site, which covers around one thousand hectares, is suited to this use. The steel mill will also benefit from CIPP's port infrastructure, with excellent facilities for handling raw materials and end products, as well as easy road and rail access.
Estimated timeline for the construction of CSP:
2010 - Earthworks;
2011 - Civil engineering works;
2012 - Equipment arrives;
2013 - Equipment assembled and mill begins operating.