Baosteel's First Overseas Steel Plant Settled in Brazil

Baosteel Victoria Iron & Steel Co., Ltd., a joint venture of Baosteel Group and CVRD of Brazil, was unveiled in Victoria, Espirito Santo, Brazil on October 3rd, which marked the official starting of Baosteel's first overseas investment project of steel plant. Present at the unveiling ceremony includes Mr. Chen Duqing, Chinese ambassador stationed in Brazil, Governor Paul Harton of Espirito Santo, Brazil, Baosteel Group board chairman Xu Lejiang, and CVRD president Roger. Baosteel Group vice general manager Zhao Kun moderated the unveiling ceremony.

Baosteel Victoria Iron & Steel Co., Ltd. is located in Anchieta, Esprito Santo, Brazil. The construction is planned for stages: 5 million ton slab for phase 1 with room for developing downstream products. The total investment for phase 1 is estimated to be US $ 3 billion, the construction to be started in the first half of 2009, and to be completed and put into production by the end of 2011. The ratio of investment for the new JV is Baosteel 60% and CVRD 40%.

Chen Duqing said in the ceremony that the joint venturing of Baosteel and CVRD in steel plant would have a far reaching significance, which caught the attention of the top leaders of both countries. Due to the large investment and high technical content, this project is one of the super large projects of overseas investment for the domestic enterprises.

The smooth operation of the JV will surely promote further the development of the bilateral economic and trading cooperation between China and Brazil. He hoped that both parties do their best to put the project into production at an early date, based on the principle of equality and mutual benefit.

Xu Lejiang pointed out in his speech that Baosteel had always regarded CVRD as the most important and most reliable strategic partner in the upstream industry. The JV of Baosteel Victoria was the result of long term cooperation and joint effort between the upstream and the downstream, as well as an important step to the strategic objective for the new round development.

The establishment of Baosteel Victoria would not only be significant for the long term development and cooperation for both parties but also bring certain social benefit to Brazil. Xu hoped that Baosteel Victoria gain environment certification as soon as possible, acquire land for the steel plant earlier, and do well in personnel, technology and peripheral supporting projects to lay the foundation for construction of the steel plant.

Before the unveiling ceremony, the parties to the joint venture signed jointly the legal documents relevant to establishment of Baosteel Victoria.