Brazil's Vale, China's CCCC to co-invest in northern Brazil steel plant

Credit: REUTERS/RICARDO MORAES

State-controlled China Communications Construction Co (CCCC) and iron ore miner Vale SA have agreed to set up a steel mill in Brazil's northern state of Pará with a $450 million investment, the state's government said on Thursday.

SÃO PAULO, May 23 (Reuters) - State-controlled China Communications Construction Co (CCCC) 601800.SS and iron ore miner Vale SA VALE3.SA have agreed to set up a steel mill in Brazil's northern state of Pará with a $450 million investment, the state's government said on Thursday.

Vale confirmed in a separate statement that it had signed a protocol of intentions to support the financial structure of the flat-rolled steel laminating venture by issuing guaranties backing the project's funding.

The plant could emerge as a key destination for iron ore produced at Vale's giant Carajas mine in the same state.

The venture has "the capacity to leverage the economy of dozens of mining municipalities, producers of high-quality raw material, with large stocks to ensure cutting-edge products" for the construction, agricultural equipment, automotive and machinery and equipment companies, the state said.

The announcement comes at a time when Vale has been grappling with the aftermath of a deadly mine collapse which led the company to post a record first-quarter net loss of $1.64 billion.

(Reporting by Roberto Samora; writing by Christian Plumb; editing by Jonathan Oatis)

((Roberto.Samora@thomsonreuters.com 5511 5644 7751 Reuters Messaging: roberto.samora.reuters.com@reuters.net))

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