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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (3717)	11/21/2004 3:06:16 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

Sino-Brazilian coal venture established www.chinaview.cn 2004-11-20 09:42:10 BEIJING, Nov. 20 (Xinhuanet) -- Iron ore giant Companhia Vale do Rio Doce (CVRD) from Brazil has agreed to establish a coal venture in Central China with the nation's top steel firm Baosteel. The venture was announced on Baosteel's website. It will have an annual production capacity of 10 million tons. The deal comes hot on the heels of Chinese President Hu Jintao's state visit to the Latin American country, which saw the signing of important trade agreements between the two countries. The venture will be based on Baosteel's existing coal joint venture with Yongcheng Coal and Electricity Group Corp in Henan Province and a number of other Chinese steel firms including Wuhan Iron and Steel Corp, Ma'anshan Iron and Steel Corp and Shagang Group, according to sources close to the deal. Investment in the new venture will total more than 1 billion yuan (US$120 million), of which CVRD will control a stake of over 25 per cent, sources said. "The joint venture will give priority to supply of coal to CVRD and Baosteel," said Baosteel's statement. CVRD is the biggest iron ore supplier to Baosteel, the parent firm of Shanghai-listed Baoshan Iron and Steel Co Ltd. The Brazilian group and Baoshan Iron and Steel Co Ltd set up a joint venture with a total investment of US$1.5 billion at the beginning of this year to produce steel in the iron ore-rich country. The new coal joint venture will also invest in China's coal, mining and commercial sectors. Coal prices in China have leapt by more than 20 per cent since the beginning of this year partly due to strong demand for the fuel in the booming steel industry. The nation's total coal output is forecast to reach 2 billion tons this year, up from last year's 1.7 million tons. China produced 1.39 billion tons of coal in the first nine months of this year, a year-on-year rise of 20 per cent. Analysts from the China Iron and Steel Association have urged domestic steel firms to forge strategic alliances with coal producers in order to secure stable coal supplies. Enditem (China Daily) news.xinhuanet.com