China''s Baosteel in deal with CVRD to set up steel plant in Brazil

Mumbai: Baosteel China's largest steelmaker, has signed a deal with Brazilian mining giant Companhia Vale do Rio Doce (CVRD) to build a major steel slab plant in Brazil.

The plant, to be located in the industrial district of Anchieta in the southern state of Espirito Santo, will have an initial capacity of over five million tonnes and will generate 3,000 direct jobs, CVRD said in an announcement on its web site.

Baosteel will hold up to 80 per cent of the joint venture at the initial stage and Vale do Rio will hold the remainder, the statement said without giving financial details.

Rio de Janeiro-based Cia. Vale do Rio Doce is the world's largest iron-ore producer. The agreement with Baosteel is consistent with CVRD's strategy of attracting new investment in the steel industry in Brazil and will increase iron ore consumption and create job opportunities in Brazil, CVRD said.

The steel project in Espirito Santo will replace another one, initially expected to take place in Maranhao state, in the northeast region, Xinhua news agency reported.

CVRD is currently participating in the construction of a steel plant in Rio de Janeiro, in association with Germany's ThyssenKrupp Steel AG. It has planned to set up another steel project in Ceara state, in partnership with South Korea's Dongkuk Steel and Italy's Danieli.