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Vale said trying to offload FGC pig iron plant in Brazil

Keywords: Tags  Vale, Ferro Gusa Carajás, FGC, Carajás, iron ore, pig iron, Nucor, Juan Weik Steel First


SÃO PAULO — Vale SA is trying to determine "the best destination" for the Ferro Gusa Carajás SA (FGC) industrial plant, a pig iron producer in Brazil’s northern region of Carajás.

The iron ore miner stopped production at the plant at the end of 2011, just six years after it was commissioned through a joint venture with steelmaker Nucor Corp. in 2005.

Asked whether the plant would be sold or dismantled, the Rio de Janeiro-based company told AMM sister publication Steel First that so far "only a few materials and equipment (have been) transferred to other Vale units."

It confirmed that FGC’s remaining pig iron inventories had been sold, although it did not provide details. Sources in Carajás told Steel First last week that 70,000 tonnes of pig iron from FGC were sold to Nucor for $403 per tonne c.f.r.

FGC, which has a capacity of 400,000 tonnes per year, was a project that "was born already dead," a well-placed source in Carajás said. "It was the result of political pressure. It didn’t make sense from the beginning."

Among the problems was the fact that it made Vale "both a supplier to and a competitor of" the region’s independent pig iron producers. It also was a very small asset for Vale, located in an area and within a business sector in Brazil which from time to time suffered from accusations of illegal labor and deforestation.

Vale originally owned 78 percent of the project, but it bought Nucor’s stake when the Charlotte, N.C.-based company pulled out of the venture in 2007 (amm.com, April 20, 2007).

In a move that foreshadowed the shuttering of FGC, Vale decided to sell its north Brazilian forest assets to São Paulo-based pulp and paper producer Suzano Group in 2009. Carajás pig iron makers, including FGC, use charcoal made from planted eucalyptus to charge their blast furnaces. 

A version of this article was first published by AMM sister publication Steel First.


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