Shougang partners with CVRD of Brazil
By Gong Zhengzheng (China Daily)Updated: 2007-01-04 10:06
Shougang Group, China's fifth-biggest steel mill, plans to join forces with
Brazilian iron ore provider CVRD to ship ore to its new North China
base.
The two parties have held preliminary talks on forming a joint
venture to ship iron ore from Brazil to Shougang's new plant, which is being
constructed in Caofeidian in Bohai Bay, Chen Hanyu, an official from the Beijing-based company, told China Daily.
Shougang is
also considering building an iron ore pelletizing plant with CVRD in Caofeidian,
Hebei Province, to supply the new plant, Chen said.
The
new plant will be completed in 2008. It will have an annual production capacity
of 8 million tons, but could be expanded to 20 million tons a year in the
future.
Chen would not reveal how much Shougang could spend on the
possible partnership with CVRD.
"The move is designed to cut freight
costs to offset mounting iron ore prices and secure a stable supply," he
said.
He said the joint venture's planned iron ore fleet would consist of
vessels with a loading capacity of at least 300,000 tons each, up from the less
than 200,000 tons of ships Shougang currently uses, which will help the company
slash freight costs by almost half.
All the ore needed for the new
Caofeidian plant, which will include a deepwater wharf, will come from abroad,
mainly from Australia and Brazil, he added.
Liu Shuiyang, vice-president
of Shougang, last month said the company would import 15 million tons of iron
ore this year, up from an estimated 12.5 million tons last year.
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