CVRD and Baosteel build new steel plant

Brazil mining giant, Companhia Vale do Rio Doce (CVRD), and China's Shanghai Baosteel Group Corporation, have signed a memorandum of understanding to build a steel slab plant, Xinhua reported.

Located in the industrial district of Anchieta, in the southern state of Espirito Santo, the steel plant is set to have an initial production capacity of five million tonnes annually. The plant will generate about 3,000 direct jobs when launched, the report said.

The new steel plant is in replacement of another plant that was supposed to be built in Maranhao state, in the northeast region of Brazil. However the project was cancelled due to disagreements with the Maranhao government on the plant's location, CVRD's CEO Roger Angelli told state media.

CVRD will have 20% stake in the new steel plant, while Baosteel will hold up to 80% of the joint project, the report said.

CVRD told media that this joint venture is in line with the company's strategy to attract new investment into Brazil's steel industry as well as increase ore consumption and job opportunities.

CVRD is at present also cooperating with Germany's ThyssenKrupp Steel AG to build a steel plant in Rio de Janeiro. The company has future plans to establish another steel project in Ceara state, in partnership with South Korea's Dongkuk Steel and Italy's Danieli.

Shanghai Baosteel Group Corporation is China's largest iron and steel maker.

Companhia Vale do Rio Doce is a diversified metals and mining company in Brazil.