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VALE Signs MOU with JFE Steel and Dongkuk Steel
04/09/2008 - Companhia Vale do Rio Doce signs a memorandum of understanding with Japan’s JFE Steel and South Korea’s Dongkuk Steel Mill to conduct a feasibility study for construction of a steel slab plant in the Industrial District of Pecém, in the Brazilian State of Ceará.
Companhia Vale do Rio Doce (VALE, formerly known as CVRD) has signed a memorandum of understanding (MOU) with JFE Steel Corp., Japan, and Dongkuk Steel Mill, Co, South Korea, to conduct a feasibility study to analyze the construction of a steel slab plant in the Industrial District of Pecém, in the Brazilian State of Ceará.
VALE and Dongkuk had originally announced a smaller-scale project on November 20, 2007. The VALE-Dogkuk project targeted an initial production capacity of 2.5 million tonnes per year with the potential for a future expansion to 5 million tonnes per year.
With the new MOU, JFE Steel Corp. could have the opportunity to participate in an enlarged project, potentially including the construction of a steel slab plant with an initial annual production capacity of 5 to 6 million tons per year. The feasibility study is expected to be completed in the coming months.
If JFE determines that the project is feasible, it will be implemented by all three partners, with JFE as the majority shareholder. Otherwise, the project will continue to be conducted by VALE and Dongkuk, as previously announced.
According to VALE, this initiative is consistent with its strategy of attracting new investments to the steel industry in Brazil through minority stakes, thereby increasing iron ore consumption in the country.
JFE Steel Corp. is a large Japanese steelmaker. Dongkuk Steel Mill is one of the largest steel producers in South Korea.
