SINGAPORE Taiwans China Steel Corp. plans to spend $62.46 million to acquire a 19-percent stake in Sakura Ferroalloys Sdn Bhd, a project in the Malaysian state of Sarawak, the company said June 19.
The joint venture, led by South African manganese ore and ferroalloys supplier Assmang Ltd., will produce high-carbon ferromanganese and silicomanganese, Kaohsiung-based China Steel said.
The 169,000-tonne-per-year project is scheduled to commence operations in 2016.
China Steel has an offtake allocation of 30,000 to 32,000 tonnes per year from the project, which equates to one-third of the Taiwanese groups annual consumption.
The investment will allow the company to secure a stable supply of ferroalloys and effectively reduce overall costs, China Steel said.
The investment is subject to approvals from relevant government authorities, according to China Steel, Taiwans largest integrated steelmaker.
China Steel posted a net profit, attributable to the companys owners, of NT$3.79 billion ($127 million) during the first quarter ended March 31, in contrast to a net loss of NT$702.5 million a year earlier, according to the companys latest financial results. Including non-controlling interests, the net profit was NT$4.88 billion ($162.6 million) vs. a year-earlier net loss of NT$307.9 million.
A version of this article was first published in AMM sister publication Steel First.