Vale may reduce stake in steel mill JV

Vale is in talks with two South Korean firms to reduce its stake in a joint venture to build an integrated steel mill in Brazil. Vale’s stake may decrease from 50% to 30% in the second phase of construction of the plant, while POSCO and Dongkuk Steel could increase their stakes to 35% each. Currently, POSCO and Dongkuk Steel hold a 20% and 30% stake in the project, respectively. POSCO and Dongkuk are in talks to increase their stakes in the joint venture with Vale during the second phase of construction, scheduled to begin after the first phase is completed in 2014. In November 2010, Vale signed a preliminary deal to acquire a 50% stake in the first phase of the steel mill with annual production capacity of 3 million tns. The project is expected to require USD 4 billion in investments in its first phase. Located in Ceara, Brazil, the plant will add another 3 million tns of capacity in the second phase of construction.

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