Brazil’s Vale do Rio Doce and China’s Baosteel launch joint venture in Brazil

4 October 2007

Vitória, Brazil, 4 Oct – Brazilian mining giant Companhia do Vale do Rio Doce (CVRD) and Chinese steel maker Baosteel are looking for a partner to be part of their consortium set up to build Companhia Siderurgica Vitória (CSV), a steel plant in the Brazilian state of Espírito Santo, said the CVRD executive director for ferrous metals, José Carlos Martins.

According to Martins, the Banco Nacional de Desenvolvimento Económico e Social (BNDES) is a candidate for partner, but its demands for a certain percentage of Brazilian ownership of the project could limit the investment.

“It has not yet been defined if it will be the BNDES, it could be a Chinese investment bank, or another partner. The cHinese want to have up to 60 percent and Vale wants 20 percent,” Martins said, after the opening of the joint venture’s offices in Vitória.

CSV, a project costing US$5.5 billion, will start operating in three to four years and will have the capacity to produce 5,000 tons of steel per year, a level which could be increased to 10 million tons, if there is enough demand.

CVRD and Baosteel negotiated the construction of a steel plant in Brazil five years ago, but problems with the government of Maranhao state led the companies to opt for the state of Espírito Santo.

As well as the steel works, the project includes a railroad line, port and a 400 MW thermoelectric power plant, which will all be finished simultaneously, said the chairman of CVRD, Roger Agnelli. (macauhub)