The Supervisory Board of ThyssenKrupp Steel AG today, December 3, approved plans to conclude a joint feasibility study with Brazilian iron ore producer Companhia Vale do Rio Doce on the construction of a steel mill in Brazil.
Brazil’s Companhia Vale do Rio Doce (CVRD) is the largest producer of iron ore and pellets in the world, and Germany’s ThyssenKrupp Stahl A.G. is one of the largest European steelmakers,
This procedure has also been approved by the Supervisory Boards of ThyssenKrupp AG and ThyssenKrupp Stahl AG. The study is to be completed by summer 2005.
The next step will be the creation of a Joint Venture Company, Companhia Siderúrgica do Atlântico (CSA) to conclude the feasibility study and to implement the project.
Under preliminary plans, the project will have an annual capacity of 4.4 million metric tons. The investment in two blast furnaces, a melt shop with two converters and two continuous casters will amount to €1.3 billion.
The slabs produced will be exported to the growth markets of the NAFTA countries and to Europe. Production of the first slab is planned for 2008.
Prof. Dr. Ulrich Middelmann, Executive Board Chairman of ThyssenKrupp Steel AG, said:
“In CVRD we have found a strong Brazilian partner for the optimal realization of our growth strategy. The investment will pay off thanks to the cost advantages of Brazil as a production location. It is cheaper to transport slabs than bulky ore.”
The plans in Brazil are part of ThyssenKrupp Steel’s strategy aimed at sustainable value enhancement and maintaining a leading position in the global steel industry. The main pillars of this strategy are continued cost reductions and efficiency improvements, technology leadership, internationalization and globalization.
Roger Agnelli, Chief Executive Officer of CVRD, the largest producer of iron ore and pellets in the world, welcomed the partnership:
“CVRD is happy to have ThyssenKrupp Stahl as a partner in an investment that will represent a major step forward in the world steel industry and certainly will contribute to the Brazilian development.”