Vale announces new strategic partner at Pecém Steel Company

A new strategic partner confirmed its intention to join Companhia Siderúrgica do Pecém - CSP. Posco - South Korea's largest steel producer and one of the biggest in the world - is joining Vale and Dongkuk in the project, which is being built at the Pecém Industrial and Port Complex (CIPP) in the state of Ceará, Brazil. The new CSP shareholders participation will be, approximately, Vale 50%, Dongkuk 30% and Posco 20%.

According to Vale's CEO, Roger Agnelli, the entry of the new partner demonstrates international investors' interest in projects in Brazil. "It is our understanding that Brazil is the best place to produce steel. As a result, we have stimulated partnerships with our customers to increase production in the country," he explained. Posco's participation is strategic in terms of developing the CSP project. "The entry of this new partner will add even more value, as we will be supported by Posco's technology and operational experience in major integrated steel mills," said Aristides Corbellini, director of Vale's steel business.

CSP will be an integrated mill capable of producing 3 million tons of steel slabs for the export market, and this figure may reach 6 million tons in a second phase. Implementation began on 16 December 2009 and earthmoving activities are currently proceeding. The steel mill is due to be operating in 2014. CSP is one of the most important private projects in the Northeast region of Brazil, and one of the biggest in the country, requiring a planned investment of US$4 billion. Besides steel slabs, CSP will also produce electricity for its own use, with surplus power sold on the domestic market. The project will help the country's steel industry to continue growing, while adding value to iron ore and generating wealth and development for the state of Ceará and the rest of Brazil.

The state was chosen due to its logistics facilities and its strategic location close to export markets. In addition, the project's site, which covers approximately 1,000 hectares, is in an area appropriate for this kind of land use. The steel mill will benefit from the port infrastructure at CIPP, which has excellent cargo loading and unloading facilities and transport access via roads and railroads. All of the technical plans for CSP have been shared with local communities, business people and public entities, emphasizing the project's social and environmental commitments. A significant part of the total investment is allocated to acquiring modern equipment to monitor and control air emissions, liquid effluents and other waste. As well as helping the local economy by training people and generating jobs and income, the venture will boost the state of Ceará's GDP growth.