BNamericas reported that a group of five Chinese companies led by steelmaker Baosteel has acquired a 15% stake in Brazilian firm CBMM, the world's biggest niobium producer, for USD 1.95 billion.

Baosteel teamed up with CITIC, Anshan Iron & Steel, Shougang and Taiyuan Iron & Steel to buy the stake.

Baosteel said that "The investment has a very relevant strategic value for all parties." It added that worldwide demand for niobium recorded an annual growth rate of about 10% from 2002 through 2009, boosted by the growing need for high grade steel.

The deal follows the purchase of another 15% stake in CBMM, also for USD 1.95 billion, in March by a group of Japanese and South Korean companies, including Nippon Steel, JFE Steel and POSCO.

Demand for niobium, a mineral mostly used in steel alloys, is expected to grow faster than the expansion in world crude steel production. China is the world's biggest importer of niobium.

According to national mining association Ibram, Brazil has the largest niobium reserves in the world, followed by Canada and Australia. In 2010, Brazil produced approximately 80,000 tonnes of the metal, or 96% of total global output.

(Sourced from www.bnamericas.com)