Aug 6 2007
Companhia Vale do Rio Doce (CVRD) announces that it is a partner in a joint venture that have entered into an agreement to acquire substantially all assets of the ArcelorMittal USA wholly-owned Sparrows Point (Sparrows Point) steel mill.
The transaction is subject to the customary precedent conditions, including the approval by the United States Department of Justice.
CVRD partners in the joint venture are Industrial Union of Donbass, a Ukranian steel company, Esmark Inc., a U.S. steel services company, Wheeling-Pittsburgh Corporation, a U.S. steel company, and some U.S. based institutional investors.
CVRD is committed to invest up to US$ 270 million to take a minority stake in the joint venture whether and when the transaction is approved.
Sparrows Point has state-of-the art facilities, full ocean access for import and export, and potential to become a player in the seaborne market. It is an integrated steel mill, located in Sparrows Point, Maryland, in the east cost of the U.S. Sparrows Point has a nominal capacity to produce 3.9 million metric tons of crude steel per annum and is an important supplier of flat and galvanized steels, tin mill and semi-finished steel to the North American market.
The acquisition of Sparrows Point is consistent with our strategy of investing in minority stakes in steel assets to foster iron ore sales growth.