Beijing, China, 12 Oct – Brazilian mining company MHAG Mineração has been in contact with Chinese companies in order to supply iron ore to steel makers in China, the vice-president of the China Iron and Steel Association (CISA) said in Beijing.
Luo Bingsheng, said recently that MHAG Mineração “has large-scale cooperation projects with the most important steel makers in China.”
According to Luo, MHAG Mineração will formally begin its cooperation with China in 2008, supplying Chinese steel makers with 30 million tons of iron ore per year.
MHAG will make the details of the deal public by the end of November, said the vice-president of the CISA.
MHAG will compete in the Chinese market with Brazilian mining giant Comapnhia do Vale do Rio Doce (CVRD), which controls Brazilian sales of iron ore to China.
CVRD, the main Brazilian group in the sector and the world’s largest iron ore producer, on October 3 agreed to a joint venture with China’s Baosteel to create a steel works in the state of Espírito Santo, in the south of Brazil, which is initially expected to produce 5 million tons of steel per year.
Construction of the unit – Companhia Siderúrgica Vitória – is expected to be launched in the first half of 2009 and will begin by producing 5 million steel plates for export by 2012.
Baosteel said that it expected to invest US$3.3 billion in the project, which is estimated to cost US$5.5 billion in total.
China has over 6,600 steel manufacturers, and production at the largest four (Baosteel, Wuhan Iron and Steel, Angang Steel and Shougang) account for 18.5 percent of the country’s total production.
China is expected to import around 367 million tons of iron ore in 2007.
China became the world’s biggest exporter of steel in 2006, and is projected to export 57.3 million tons in 2007. (macauhub)