06 November,2009 02:20 PM IST | | Agencies
ArcelorMittal SA, the world's largest steelmaker, plans to invest $5 billion to build a new steel mill in Brazil, CEO Lakshmi Mittal said in statements published by Brazilian business daily Valor.
The plans to invest in a plant in the southeastern state of Espirito Santo were announced in a meeting on Wednesday in London between Mittal and Brazilian President Luiz Inacio Lula da Silva, the newspaper said on Thursday.
"I gave the president details about what we intend to do in Brazil," Mittal told Valor.
The steel powerhouse will partner with Brazilian mining giant Vale - the world's largest iron ore producer and exporter - on the new mill, named Companhia Siderurgica de Ubu.
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ArcelorMittal will replace China's BaoSteel as Vale's joint-venture partner after the Chinese firm pulled out of the project.
Mittal said that although there is currently a global surplus of steel-making capacity, his company is confident about the sector's future growth prospects and has therefore chosen to invest in a mill that will take time to come on steam.
"With Brazil's future growth, steel-production units can't be built from one day to the next. So we have to build thinking about that," the executive said in reference to the company's long-term plans.
Mittal also said the company has its sights set on projects in Brazil that had been suspended amid the recession and praised the Brazilian government for its economic management amid an adverse global financial climate.
"We have plans to expand in Brazil. We want to increase our presence in the country," said the CEO of a company whose holdings in Brazil include steelmakers ArcelorMittal Tubar, ArcelorMittal Inox Brasil and four steel plants formerly owned by Belgo-Mineira, now part of the ArcelorMittal group.
The CEO recalled that in a meeting of ArcelorMittal directors last month Brazil was chosen as a priority country for investment in the wake of the sharp drop in steel production triggered by the global economic crisis.
The company also plans to upgrade three of its plants in the country to expand their capacity to produce steel used for civil construction and infrastructure projects.
