The iron ore business unit of Anglo American Brazil (Anglo Brazil) hopes to conclude a contract with the Italian-Argentinian group Techint, to supply the latter with the ore for a planned new steel plant in Rio de Janeiro state, before the end of the first quarter of this year. This has been revealed by Anglo Brazil iron ore business unit President Paulo Castellari Porchia. “We are now confirming the availability of volumes for Ternium, pending only the settlement of two commercial matters.”
Ternium is a Techint subsidiary and is a major steelmaker in the Americas, with an annual production capacity of some 10-million tons of finished steel products and operations in Colombia, Guatemala, the southern US and especially Argentina and Mexico. Ternium also has a stake in Brazilian steelmaker Usiminas.
Interestingly, Castellari Porchia’s comments are the first solid indication that Techint/Ternium is going ahead with its plan to build a new steel plant at Porto do Açu in northern Rio de Janeiro state since the steel group bought a stake in Usiminas. Some observers had wondered if Techint had the financial resources to proceed with the project, after its $2.7-billion investment in Usiminas in November. In late February, it was reported that Ternium and another Techint subsidiary, Confab Industrial, were seeking syndicated loans that could total $1.05-billion, to help finance the Usiminas deal.
“We have worked hard to redirect [production] to a local buyer,” said Castellari Porchia. “We have had to renegotiate contracts with other clients to guarantee ore for Ternium.” He highlighted that Anglo Brazil had good relations with Ternium and that securing a local customer was a strategic objective for his business unit.
The new Ternium plant will be fed with ore from Anglo Brazil’s Minas-Rio project, which the global mining group bought off Brazilian miner MMX in 2007 for $7-billion. Minas-Rio will enter production during the second half of next year and will have an annual production capacity of 26.5-million tons. Ternium will receive about 25% of this, with another 25% going to Asian countries and the rest to the Middle East.