JFE, Mitsui, Erdos to Double SiMn Output at Chinese JV

JFE Steel, Mitsui & Co. and Erdos Electrical Power & Metallurgical Company, which is major Chinese ferroalloy maker, announced on Thursday the silicomanganese making joint venture, Inner Mongolia Erdos EJM Manganese Alloys will double the output capacity to annual 150,000 tonnes by end of 2008. The investment value is apparently around US$ 15 million. JFE Steel will purchase around 70,000 tonnes per year of silicomanganese from the JV to stabilize the procurement. Mitsui & Co. supports the JV in sales and raw materials supply while Erdos Electrical Power & Metallurgical expands the integrated operation from coal mine to ferroalloy. Erdos EJM will increase the capital to around US$ 30 million from current US$ 15 million. Erdos keeps controlling 51% of the JV while JFE Steel and Mitsui & Co. have 24.5% each. The JV builds no.2 plant with two 25,500 kilovolt ampere electric furnaces to make annual 75,000 tonnes of silicomanganese as the no.1 plant. The JV starts the construction in the year starting operation by end of 2008. The no.1 plant started operation in July 2006 and operates at full capacity. JFE Steel purchases maximum 45,000 tonnes of silicomanganese from the JV in 2007. The firm starts purchasing for the group companies and the group, which uses around 90,000 tonnes per year, increases the purchase volume to around 70,000 tonnes after the expansion. The JV also tries to expand the sales in Chinese market after the expansion.