A consortium including steelmakers from Japan and South Korea will take a $3.1 billion stake in a Brazilian miner to secure supplies of iron ore, one of the investors said Oct. 17.
South Korean trading giant Itochu Corp., which led the consortium, said the group will collectively take a 40% stake in Nacional Minerios SA (Namisa), which is rapidly expanding its iron ore sales.
Japan's top steelmakers Nippon Steel, JFE Steel, Sumitomo Metal Industries, Kobe Steel and Nisshin Steel joined forces with Itochu and Posco, also of South Korea, to come to the agreement.
The deal, which is still being finalized, is seen as one of the biggest investments in natural resources by steelmakers. "This is a landmark transaction and the first example of an investment in the iron ore business by a consortium consisting of both Japanese and Korean companies," Itochu said.
Namisa, a unit of Companhia Siderurgica Nacional, is expected to produce about 18 million tons of iron ore in 2009, and aims to increase annual output to 38 million tons in 2013.
The Japanese and South Korean steelmakers are also preparing to conclude separate long-term iron ore purchase agreements with Namisa. They expect to start buying iron ore from Namisa in 2009, purchasing up to 13.7 tons a year after Namisa's expansion is completed in 2013, Itochu said.
The prices of iron ore and other raw materials have been rapidly rising on the back of growing demand in emerging economies.
Copyright Agence France-Presse, 2008