Kobe Steel to Build Iron Nugget Mill in Vietnam

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Researched by Industrial Info Resources (Sugar Land, Texas)--In March, Kobe Steel Limited (TYO:5406) (Kobe, Japan) received a business investment license from the government of Vietnam to form, and later incorporate, Kobelco Iron Nugget Vietnam Limited Liability Company (Kobelco) (Hoang Mai, Vietnam). Kobelco, which was incorporated in Vietnam in April, was created to build a $570 million, grassroot iron nugget mill in the Hoang Mai Industrial Zone, which is some 250 kilometers south of Hanoi in the Nghe An province.

Currently, Kobe Steel is conducting a feasibility study to determine whether it can wrangle itself into the Vietnamese infrastructure boom. Vietnam has surpassed Japan in terms of the amount of steel consumed, and nuggets produced by Kobelco will go on to steel manufacturers for use in construction. Kobe Steel also plans to target foreign markets, as well for sales. If all goes according to plan, Kobe Steel plans to begin construction of the facility itself and the first production lines sometime during the next first quarter. When completed late in 2012, the Kobelco Iron Nugget Mill will utilize two sets of Kobe Steel's "Iron-making Technology Mark 3" (ITmk3) production equipment to produce 1.2 million metric tons per year of iron nuggets, with increased purity and a higher resistance to rusting.

Kobe Steel also has a line expansion in the pipes as well. While the grassroot facility is under construction, Kobe Steel plans to carry on with studies and permitting until approval for a line expansion is granted. If it is granted, two additional sets of ITmk3 production equipment are scheduled to undergo installation in early 2013. When the $570 million line addition is completed toward the end of 2014, Kobelco Iron Nugget Mill will have a production capacity of 2.4 million metric tons of iron nuggets per year.

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