Dongkuk Steel, POSCO and Vale Start Brazilian Plant Construction by June

Dongkuk Steel, POSCO, both South Korean steel makers, and Vale, Brazilian raw material supplier, plan to start construction of an integrated slab steel plant in Brazil until June. Dongkuk Steel is elaborating details of the project’s first phase with POSCO and Vale, including how much slabs each company purchases. The project targets construction of a blast furnace with 3-million-tonne yearly capacity. Dongkuk Steel expects for JFE Steel’s participation in the project. Dongkuk Steel aims the plant start in 2014 to stabilize the firm’s raw material procurement and improve the firm’s steel product quality, especially for plate. Dongkuk Steel’s managing director explained to a reporter of Japan Metal Bulletin.

Brazilian plant is planned to produce slab with maximum 300 millimeters of thickness. Capex value for the project will be determined along the equipment spec. Dongkuk Steel considers to purchase slab from the plant at 1.5 million tonnes per year. In the second phase, the plant’s output capacity would be raised to 6 million tonnes per year. The second phase expansion is expected to start after the completion of the first phase, according to the managing director.

Dongkuk Steel started a new plate plant with annual capacity at 1.5 million tonnes in Dangjin, South Korea in 2010. The new plant can produce steel plate by thermo-mechanical control process and heat-treated process. Meanwhile, the plant can’t provide high grade plate yet since slabs are purchased from third parties. Dongkuk Steel aims to improve product mix by integrated manufacturing process. Dongkuk Steel and Vale acquired a land of 980 hectares in Ceara Province, Brazil and started land clearing activities in 2009. Belt coverer construction is also progressed for raw material transportation.

Dongkuk Steel, POSCO and Vale concluded a diplomatic memorandum in 2010, along which Vale would share 50% in the project with Dongkuk Steel’s 30% and POSCO’s 20%. JFE Steel examines participation in the project to support Dongkuk Steel and secure slabs.