Votorantim And Grendene To Build Long Steel Mill

RIO DE JANEIRO (Dow Jones)--Votorantim Siderurgia, the steelmaking unit of Brazil＇s Grupo Votorantim, has formed a steelmaking joint-venture with Alexandre Grendene Bartelle, owner of apparel and footwear company Grupo Grendene.

The two parties will each hold 50% of the long steel mill Siderurgica Tres Lagoas, also known as Sitrel, Votorantim said in a statement.

The mill, estimated to cost $450 million, will be built at Tres Lagoas in Mato Grosso do Sul State in Brazil＇s midwestern region. Tres Lagoas is located on the Tiete-Parana waterway, which bisects Sao Paulo State, and is also on the Sao Paulo-Bolivia railroad line with a connection to Votorantim Siderurgia＇s new 1-million-ton-a-year steel mill at Resende, Rio de Janeiro State. The Sao Paulo-Bolivia railroad also connects Tres Lagoas to high grade iron ore and manganese mines operated by Vale SA (VALE, VALE5.BR) in the border area near Corumba.

The Sitrel mill will begin operation in 2012 and produce steel bars and girders using Votorantim Siderurgia-supplied crude steel.

The Estado newspaper said the mill would initially produce 300,000 metric tons a year and construction work would commence in January. Sitrel already holds the necessary environmental licenses.

Votorantim Siderurgia currently has steelmaking capacity of 1.45 million metric tons a year, and the new mill will add 1.05 million tons capacity.



-By John Kolodziejski, Dow Jones Newswires