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December 1, 2009

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Steel firm seals stake in Brazil ore miner

WUHAN Iron and Steel Group yesterday agreed to buy a stake in a Brazilian mining company for US$400 million in a deal to widen sources of iron ore supply.

Wuhan Steel will become the second-largest shareholder of Rio de Janeiro-based MMX Mineracao e Metalicos SA and will appoint two executives to MMX, the company said in an e-mail statement yesterday. Wuhan Steel didn't specify the size of the stake it bought.

The nation's third-largest steel maker is also planning to set up a mill in Rio de Janeiro State with EBX Group, MMX's holding company. Details of the joint venture, which is waiting for regulatory approval, are not available.

MMX plans to boost its annual capacity to 33.6 million tons in 2014 from its current level of 10.7 million tons. It now operates Sudeste mine and Corumba mine in Brazil and Minera mine in Chile.

The stake deal is the latest investment in overseas iron ore projects by Wuhan Steel as it seeks to trim dependence on Vale SA, Rio Tinto Group and BHP Billiton Ltd.


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