CVRD, Baosteel to meet in Jan. to discuss Maranhão start

Rio de Janeiro-based mining giant CVRD (NYSE: RIO) and Chinese steelmaker Shanghai Baosteel are to meet in January to decide a possible start date for their US$1.5bn joint venture slab plant in Brazil's Maranhão state, according to a CVRD executive. A feasibility study carried out by German engineering services company Ferrostaal AG and Chinese engineering company CISDI Engineering was recently completed and presented to both partners, said the executive, CVRD's director for shareholdings and business development José Carlos Martins. "We have finished the feasibility study and we will likely have a meeting in January to decide the beginning of the project," he told reporters after a meeting with investors. The plant would initially produce 3.7Mt/y of slabs but could expand to 7.5Mt/y. The facility will be the largest in the Brazilian steel industry in many years and is fully supported by the governments of Brazil and China and by the Maranhão state government, said CVRD, the world's largest iron ore producer. According to Martins, the feasibility study for the plant showed the investment would be approximately 20% higher than initially estimated because of tax issues. "Because it is a wholly export-oriented project, we won't have some tax benefits," he said. LIMAMAYO Meanwhile, CVRD's CFO Fabio Barbosa said after the same meeting that the company has expressed an interest in receiving information about the Limamayo polymetallic project in southern Peru but said it is too early to confirm anything more definite. "We have showed interest in getting information [about Limamayo] but it is too early to define our participation in the investment," Barbosa said. Peru's government has set a January 17 auction date for the prospect, in what it says will be the third and final attempt to sell off the property. Ten companies bought the bidding rules for the second auction on October 19 but no offer was eventually submitted. Apart from CVRD, the companies that previously bought the bidding rules include Melbourne-based BHP Billiton, Canada's Southwestern Resources (TSX: SWG) and Inmet Mining (TSX: INM), and Peruvian companies Atacocha and Minera Ares.