Wednesday, 23 Sep 2009 Mr Lula has publicly urged Vale to build steelworks at least half a dozen times since April. Mr Lula said in an interview with Brazilian financial daily Valor Economico published September 16th 2009 said that “I’m not irritated with Vale. I’ve insisted, systematically that Vale builds steelworks in Brazil. Vale can no longer afford the luxury of just being an iron ore exporter.”
Mr Edison Lobao mines and energy minister of Brazil wants Vale SA to become a major steelmaker to compete with ArcelorMittal, the world’s largest producer of the metal.
Mr Lobao said that Vale must lead Brazil into becoming a major exporter of rolled steel products. Mr Lobao said in an interview in Sao Paulo said that the government wants Vale to do more than buy minority holdings in mills. He said “We want something more substantial than that. Vale has all the conditions to become an international steel producer of that magnitude.”
Lobao also urged Vale to team up with state-controlled oil producer Petroleo Brasileiro SA to produce fertilizers. Vale and Petrobras, both based in Rio de Janeiro, are Brazil’s biggest companies by market value.
Mr Telemaco Genovesi Sao Paulo based investment manager for CBS Previdencia said that accelerating investments may create an oversupply of steel at a time when many producers are operating below capacity.
Mr Roger Agnelli CEO of Vale said July 22nd 2009 that the company is investing EUR 965 million to more than double its stake in the Cia. Siderurgica do Atlantico SA venture with ThyssenKrupp AG in Rio de Janeiro state to 26.9% from 10%.
Vale plans to invest as much as BRR 31.2 billion in steelmaking projects in Brazil that may be completed by 2014 to almost double Brazil’s crude steelmaking capacity of 41.5 million tonnes.
Vale is controlled by a group that includes Previ, the pension fund of state-controlled Banco do Brasil SA, Bradespar SA, Mitsui & Company Limited and Grupo Opportunity. The government holds 6.9% of voting capital through state controlled development bank BNDES.
(Sourced from Bloomberg)