New $1.6 Billion Pipe Steel Mill Being Constructed in Brazil

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Researched by Industrial Info Resources (Sugar Land, Texas)--Vallourec & Sumitomo Tubos do Brasil Limitada, (VSB) (Jeceaba, Brazil), is moving forward with the construction of an integrated steel mill in the city of Jeceaba, about 100 kilometers south of Belo Horizonte, southern Brazil. The total investment is estimated at approximately $1.6 billion.

The project entails the construction of an integrated steel mill and a high-quality seamless pipe mill with two blast-furnaces, one electric arc furnace, a casting unit, a rolling-mill unit and a pelletizing plant. The steel mill will have an annual capacity of 1 million tons of crude steel, of which approximately 70% will be used to feed the tube mill, which is expected to produce 600,000 tons per year of seamless pipes. The pipe production will be used to supply the growing demand of the global oil industry.

VSB is conducting basic civil work on the new facility, which is being performed by the Brazilian constructor Barbosa Mello Limitada (Belo Horizonte). The company Mascarenhas Barbosa Roscoe Limitada (Sao Paulo, Brazil) is in charge of foundation works on the rolling mill unit. Separately, a constructor for major civil works will be selected and announced in the next few weeks. Brazilian Guimar Engenharia Limitada (Rio de Janeiro) is in charge of all project management. Project completion is set for the second quarter of 2010, and production is expected to start May 2010.

VSB is a joint-venture of the world's leading producer of the seamless steel tubes Vallourec Group (EPA:VK) (Boulogne-Billancourt, France) (56%) and Sumitomo Metal Industries Limited (TYO:5405) (Tokyo, Japan) (44%). The site for the steel mill was selected for its proximity to the Pau Branco iron ore mine, owned by the Vallourec Group in Brazil. Pau Branco will supply 100% of the complex's raw materials demand.

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