Brazilian miner Vale announced the sale of its 50 percent capital stake at Companhia Siderurgica do Pecem (CSP), a slab producer located in the northeastern state of Ceara, for a value of $2.2 billion, adding that the sale is in line with its strategy of portfolio simplification.
According to Vale, its partners in the plant are also selling their stakes to ArcelorMittal; 30 percent for Dongkuk and 20 percent for POSCO.
In another announcement, ArcelorMittal confirmed the acquisition of the plant, adding that the acquisition will bring several strategic benefits to ArcelorMittal, including the potential to expand the company’s position in the high-growth Brazilian steel industry.
ArcelorMittal added that the company will capitalize on the significant planned third-party investment to form a clean electricity and green hydrogen hub in Pecem, while adding a 3.0 million mt per year of high-quality and cost-competitive slab capacity, with the potential to supply slab intra-group or to sell into North and South America.
According to ArcelorMittal, the acquisition will allow for further expansions by the company, such as the option to add primary steelmaking capacity, including direct reduced iron and rolling and finishing capacity, while capturing over $50 million of identified synergies.
Aditya Mittal, CEO of ArcelorMittal said that “In CSP, we are acquiring a modern, efficient, established and profitable business which further enhances our position in Brazil and adds immediate value to ArcelorMittal. There is significant potential to decarbonize the asset given the state of Ceara’s ambition to develop a low-cost green hydrogen hub and the huge potential the region holds for solar and wind power generation.”
The acquisition is subject to the customary corporate and regulatory approvals.