Dongkuk Sings MOU to Construct Steel Works with CVRD in Brazil

Dongkuk Steel, South Korean major steel maker, announced on Thursday the firm signed a memorandum of understanding (MOU) to construct an integrated steel works with CVRD and Ceara state governmentin Brazil. Dongkuk Steel plans to construct a steel works to produce slabs at 3 million tonnes per year in the first phase. The investment is US$ 4 billion for the first phase. Dongkuk Steel now procures slabs from other makers.

Dongkuk Steel and CVRD will establish a joint business company, CSP, 51% shared by Dongkuk and 49% by CVRD, to construct an integrated steel works in Ceara.

Dongkuk Steel and JFE Steel, Japanese steel maker, have progressed feasibility study about this project. The project schedules to expand the production capacity to 6 million tonnes per year in the second phase. JFE Steel is expected to participate in the project from the second phase.

Dongkuk Steel expanded its plate capacity at Pohang steel works last year. The firm will also start operation of a new plate mill inside Tangjin steel works in November 2009. The firm now procures slabs from JFE Steel. Dongkuk aims to secure slabs from its own plant.

CVRD is constructing another integrated steel works in Rio de Janeiro with ThyssenKrupp to produce slabs at 5 million tonnes per year. The works will start operation at the end of December 2009. CVRD also plans steel works construction in Para and Espirito Santo of Brazil. CVRD aims to supply steel materials stably by participation in the steel projects.