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Usiminas Updates Investment Plan
07/10/2008 - Usiminas is revising its capital investment plans to incorporate the construction of a third mill with a slab production capacity of 5 million tonnes/year at Santana do Paraíso in the vicinity of Ipatinga Works.
Usiminas— Nippon Steel Corp.’s South American alliance partner and an equity-method-applicable company of Nippon Steel—has announced a number of updates to its ongoing investment plan.
Originally announced last year, the company’s investment plan centers on expansion of steelmaking capacity at its Ipatinga Works to 3.2 million tonnes/year. The company is now revising its plans to reflect a continuing increase of steel demand in Brazil and the company’s acquisition of iron ore mines, among other factors. The updated plan calls for the construction of a third mill—with a slab production capacity of 5 million tonnes/year—at Santana do Paraíso in the vicinity of Ipatinga Works.
Usiminas will make a total investment of US$14.1 billion through 2012 for the planned steelmaking-capacity expansion, rolling-capacity increase, and iron ore mines acquisition.
Steelmaking Capacity Expansion—For the steelmaking-capacity expansion at Santana do Paraíso, the company has identified a site about 7 km from Ipatinga Works (in Minas Gerais State) that will allow the new facility to use the existing infrastructure and logistics systems.
When No. 1 Blast Furnace commences commercial operation in the first half of 2011, the facility’s steelmaking capacity will be 2.5 million tonnes/year. No. 2 Blast Furnace is to commence commercial operation in 2012, adding 5.0 million tonnes/year of additional capacity. Investment for this portion of the expansion is estimated at US$5.7 billion.
Usiminas also plans expand steelmaking capacity at Cubatão. The company is currently continuing studies about building another steel plant with a capacity of 3 million tonnes/year for slab production at a site adjoining Cubatão Works in the São Paulo State.
Rolling and Finishing Capacity Expansion—Rolling-capacity increases are planned for both the Ipatinga and Cubatão Works. At the Ipatinga Works, plate mill capacity is to be increased by 500,000 tonnes/year, and hot-strip mill capacity is to be increased by 150,000 tonnes/year. At the Cubatão Works, a new hot-strip mill will add 2.3 million tonnes/year as phase-one; it will be capable of expansion to up to 4.8 million tonnes/year.
In addition, an additional 550,000 tonnes/year hot dip galvanizing line is to be installed at UNIGAL, a joint venture between Nippon Steel and Usiminas for the manufacture of automotive galvanized steel sheet.
Iron Ore Capacity Expansion—Against the background of the ongoing tendency toward vertical integration in the steel industry, with the objective of realizing cost reduction and efficient operation, Usiminas acquired iron ore mines of J-Mendes in Serra Azul region in the Minas Gerais State. Usiminas will increase its iron ore production capacity from the present 5 million tonnes/year to 29 million tonnes/year by 2013.
In addition, Usiminas also recently acquired a property of 850,000 square meters in Baía de Sepetiba, a port area in the Rio de Janeiro State. Usiminas is now planning to construct a shipping terminal for Usiminas’ iron ore and steel products.
Usiminas will carry out the above investment plan with the aim of becoming the No. 1 steel company in the Americas focusing on high-grade steel. Nippon Steel said that it would continue to support Usiminas with a view to further increasing the corporate value of both companies.
Usiminas is the largest manufacturer of flat steel, mainly high grades, in South America.
