Nippon Steel-Linked Usiminas to Invest 8.4 B. Dlrs for Expansion

Tokyo, Aug. 9 (Jiji Press)–Top Brazilian steelmaker Usiminas, an affiliate of Japan’s Nippon Steel Corp. , is set to spend 8.4 billion U.S. dollars to introduce new facilities and equipment including two blast furnaces, Nippon Steel said Thursday.

The investment is intended to boost Usiminas’ capacity to produce high-end steel products including those used for automobiles and ships, Nippon Steel said. Usiminas, whose official name is Usinas Siderurgicas de Minas Gerais SA, is aiming to increase steel supply in the Brazilian market and exports to North America and Europe.

Specifically, Usiminas will spend 5.7 billion dollars to expand its existing steelworks partly through the establishment of a blast furnace with an annual production capacity of 2.2 million tons.

The company will also construct a new steelworks that has a furnace with an annual capacity of 3 million tons at a cost of 2.7 billion dollars.

While Usiminas plans to procure the funds necessary for the expansion on its own, Nippon Steel is set to provide technical assistance for the investment projects and may jointly operate the new steelworks with Usiminas.

The planned investment is expected to raise Usiminas’ annual crude steel production to over 11 million tons by 2011, according to Nippon Steel. In 2006, its crude steel production totaled 8.77 million tons.

Nippon Steel is trying to reinforce ties with its partners, including South Korea’s Posco amid persistent speculation that global industry leader Arcelor Mittal may move to acquire Asian steelmakers for its further expansion. Arcelor Mittal’s crude steel production is more than triple that of Nippon Steel.END

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