China’s Wuhan Iron & Steel offers to buy stakes in Brazil

24 June 2009

Rio de Janeiro, Brazil, 24 June – Chinese group Wuhan Iron & Steel has made an offer to acquire a stake of 9.09 percent in Brazilian mining group MMX for US$120 million and 23 percent of subsidiary MMX Sudeste Mineração for US$280 million, the mining group said.

In a statement, the Brazilian group said that, although the proposal is not binding for either side, it plans to work with Wuhan to conclude the transaction as quickly as possible and also said that it would simultaneously negotiate a long term contract purchase and sale contract for iron ore between MMX Sudeste and the Chinese group.

The announcement was made Monday and is a repeat of a statement issued on 19 May, when the two companies, together with LLX, announced the beginning of negotiations for the construction, by Wuhan, of a steel works in Porto do Açu – which the logistics company will build in the North of Rio de Janeiro state – with capacity to produce up to 5 million tonnes of steel per year.

At the time, MMX said it was negotiating a possible sale of a stake to Wuhan and a long term contract to supply iron ore via MMX Sudeste.

As well as this, there were also talks for a deal to use port services between MMX Sudeste, LLX Sudeste Operações Portuárias and about the possible supply of Wuhan’s steel products to Estaleiros (BEX), a company that is part of the EBX group that is involved in ship building. (macauhub)