December 03, 2008

Usiminas to spend USD 150 million to double J Mendes output

BNamericas reported that Brazilian integrated steel group Usiminas has budgeted USD 150 million to expand its newly acquired iron ore producer J Mendes' capacity from roughly 6 million tonne per year to 11 to 13 million tonne per year within three years.

Mr Paulo Penido Pinto Marques CFO of Usiminas said that the company is also considering a further USD 600 million investment to build a new concentrator for J Mendes to expand capacity to some 29 million tonnes per year by roughly 2012-2013.

According to Mr Marques, Usiminas has been also mulling the creation of a palletizing plant for J Mendes in roughly 2014-2015 that would require an investment of up to USD 1 billion, but the project is merely being considered and there are no concrete plans. He said that "There is no decision about this at this point in time.”

He added that Usiminas is budgeting USD 1.25 billion in expenditures for this year, not including the money to be spent on J Mendes.

Usiminas acquired Minas Gerais based J Mendes in a USD 935 million purchase of three iron ore miners, which also included Somisa and Global Mineraçao in early February.