Brazil's Vale to Build Steel Plant in Amazon

The $3 billion plant will have an annual output of two million metric tons.

Mining giant Vale received the government's green light to build a $3 billion steel plant in northern Para state, in the Amazon jungle, said company president Roger Agnelli.

"Our role is to promote the growth of steel production in Brazil and to do that we're looking for the best technologies and processing methods," Agnelli said.

The new plant will have an annual output of two million metric tons.

The steel mill building project includes a railway line to ferry iron ore from the company mines in Carajas to Paraupenas, a port town on the Tocantins river. Some 16,000 workers will be needed to build the facility, which will employ 5,300 people and provide indirect employment to 16,000 others when it is up and running.

The plant is expected to be operational by November 2013.

Separately, Vale denied through a spokesman Japanese media reports it had agreed on a massive price increase on the iron ore it exports to Japan. "Vale has made no announcement to the market. When Vale has something to announce, it will do so," said a company spokesman.

The Ashai Shimbun newspaper said the new price of Vale's iron ore would be $110 per ton for the April-June quarter, while the business daily Nikkei put the figure at $105 and the Yomiuri daily said the price would be $106.

Ore prices were down last year, off a record $77-79 per ton in 2008. Asian steelmakers were paying around $60 dollars per ton under earlier annual contracts.

Negotiations on quarterly 2010 prices are set to be finalized by the end of next month.

Copyright Agence France-Presse, 2010

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