Beijing, China, 5 Jan – Brazilian mining giant Companhia do Vale do Rio Doce (CVRD), the world’s largest iron ore producer, plans to carry out a joint venture in China to sell the ore on the Chinese market, daily newspaper China Daily reported.

The joint venture with the Shougang company, China’s fifth largest steelmaker, will be responsible for transporting iron ore from Brazil to a new steelmaking facility owned by Shougang, which will be built in Hubei province.

Chen Hanyu, director of Shougang, said that the decision had been made to reduce transport costs and also ensure a stable supply of ore.

The price of iron ore is one of the main problems for Chinese steelmakers like Shougang, which announced it planned to import 15 million tons of ore this year, or 20 percent more than in 2006.

Few details were given about the joint venture between Shougang and CVRD, but it was reported that the companies would set up a fleet of iron ore transport ships with a capacity of 300,000 tons each.

Shougang’s current fleet is made up of ships with a capacity of less than 200,000 tons.

The steelmaking facility to be built will be completed in 2008 and have an annual production capacity of 8 million tons of steel. (macauhub)