Wuhan Iron and Steel Company (WISCO), China's third biggest steel maker, will complete its acquisition of a stake in Brazilian iron ore miner MMX on 26 February. The company will then commence the construction of a steel mill in Brazil, the first overseas project for a Chinese steel company.
WISCO is paying US$400 million for a 21% stake in the enlarged share capital of MMX. The funds will be used to construct the mill, which will have a capacity of 5 million tons per annum and will be located in the new port of Acu, north of Rio de Janeiro. The purchase of the MMX stake will enable WISCO to succeed in its primary aim of securing iron ore resources.
The deal follows a memorandum of understanding WISCO and MMX signed in May 2009, which includes a 20-year contract for the sale and purchase of iron ore.
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