ArcelorMittal signs JV with Valin Steel Group of China

14 August 2008

After having been rebuffed in its bid to acquire a 70-per cent stake in China Oriental by Chinese regulators, ArcelorMittal, the world's largest steel company, has signed a joint venture agreement with Hunan Valin Steel Group Co, Ltd. to make electrical (silicon) steel.

This follows the auto sheet JV agreement signed by both parties last June. These two JVs constitute part of the realisation of the framework agreement signed by Valin and ArcelorMittal in November last year. (See: ArcelorMittal launches automotive steel joint venture in China)

This JV will build cold rolling and processing facilities for the production of non-grain oriented (NGO) and grain oriented (GO) electrical steels.

The new JV, named Valin ArcelorMittal Electrical Steel Co., Ltd., has a registered capital of 2.6 billion RMB, ($378 million) with each taking an equal stake in the venture, the investment in which is estimated at 6.5 billion RMB ($948 million).

This JV is aiming for an annual production of 400,000 tons non-grain oriented and 200,000 tons grain oriented steel. ArcelorMittal will transfer its latest NGO and GO technologies to the joint venture.

Meanwhile, Valin Lian'gang, a subsidiary of Valin Steel Tube & Wire, signed a supply agreement with the joint venture. In order to supply high-quality hot-rolled substrate to the Electrical Steel JV, Valin Liangang also signed a Technology License Agreement with ArcelorMittal for the transfer of NGO and GO upstream technologies.