Chinese steel producer Hunan Valin Iron and Steel Group Co. Ltd. (Valin Group) has received approval from China's National Development and Reform Commission (NDRC) to establish two steelmaking facilities, for the production of automotive sheet and electrical steel, in cooperation with the world's largest steelmaker ArcelorMittal. Both facilities will be set up in the Chinese province of Hunan, where Valin Group is based.
The auto sheet project will have an annual capacity of 1.6 million mt with a breakdown of 1.1 million of cold rolled sheet and 500,000 mt of hot galvanized sheet. The products will mainly be for automotive application and also for the home appliance and construction sectors. The electrical steel facility will produce 160,000 mt of grain-oriented electrical steel and 340,000 mt of non-grain-oriented electrical steel per year. The total planned investment for the two projects is RMB 12.3 billion ($1.8 billion), with RMB 5.41 billion ($799 million) earmarked for the auto sheet project and RMB 6.89 billion ($1015 million) for the electrical steel project. The capital fund for the auto sheet project totals RMB 2.38 billion ($351 million), with Valin Group, ArcelorMittal and Valin Steel respectively investing 33 percent, 33 percent and 34 percent of this figure. On the other hand, the capital fund for the electrical steel project is RMB 2.9 billion ($427 million), with Valin Group and ArcelorMittal each investing 50 percent.