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Brazilian mining giant Companhia Vale do Rio Doce (CVRD) and the South Korean Dongkuk Steel Mill Co. have agreed to construct a steel-making plant in northeastern Brazil, Brazilian government officials and representatives from both companies announced on Tuesday.
The two companies are expected to invest 2 billion reais (1.14 billion U.S. dollars) into the plant, which will be located in Ceara state.
The plant is designed to begin operations in 2011 with an initial annual production capacity of 2.5 million tons of steel plate, and the companies plan to double that capacity in the future.
"Our intention is to bring more plants to Brazil," said CVRD's Chief Executive Officer Roger Agnelli during the signing ceremony of the memorandum of understanding, which was also attended by Brazilian President Luiz Inacio Lula da Silva and Dongkuk Steel's representatives.
A study on the viability of the partnership is expected to be concluded within the next few months.
This is the third joint venture agreement CVRD has signed with foreign investors to build steel plants over the past three years. The three joint ventures will draw a total investment of 13.3 billion dollars and reach a total annual production capacity of 17.2 million tons of steel.
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