China’s Baosteel and CVRD of Brazil to build steel plant

19 July 2007

Sao Paulo, Brazil, 19 July – The southeastern Brazilian state of Espirito Santo has signed an accord with Baosteel of China and Companhia Vale do Rio Doce (CVRD) to build a factory that will make steel plate for export, an official has said.

In comments to Macauhub, Espirito Santo’s development secretary, Guilherme Dias, said: “Today in Brazil, 34 million tons of steel are produced per year. This factory will alone produce 5 million tons annually in the first phase, and production could be doubled to meet future demand in the Brazilian market.”

Dias was in Shanghai Tuesday to sign the accord, whose value was not made public. He said the Espirito Santo state government had donated land for construction of the new steelworks.

The Soouth China Morning Post said today that “the plant would cost US$ 3 billion to US$ 4 billion with Baosteel funding 80 to 90 per cent of it”.

The paper also said that “the construction of Baosteel´s plant would take about five years and create 21,500 jobs”

CVRD will handle infrastructures, logistics and mineral supplies, while Baosteel will manage the new plant. The Chinese firm will open an office in Vitoria, capital of Espirito Santo, to begin development of the project.

The Brazilian mining company said its new project was “in keeping with its strategy of drawing new investment to Brazil.”

In 2004, CVRD and Baosteel signed a contract worth US$ 2.5 billion to build a steelworks in the northeastern state of Maranhão with an annual production of 4.1 million tons.

But the two companies declined to comment on whether the factory in Espirito Santo is designed as a replacement to the delayed project in Maranhão, which has not yet reached agreement with the companies on where the steelworks will be built.

The new steelworks in Espirito Santo will be built in the town of Anchieta, about 80 kilometers from Vitoria, on a 2.5 hectare site ceded by the state last week.

“The Anchieta area already has a port, which will be enlarged, small factories making wood fuel for boilers and several nearby highways, in addition to a railway which will be built by CVRD, said the Espirito Santo official. (macauhub)