Chinese Firm Signs JV Agreement to Operate Miss. Steel Mill

Anshan Steel, a China-based steel company, has signed a letter of intent with Steel Development Co. to form a joint venture to build and operate an electric arc furnace (EAF) rebar mill in Mississippi. The mill already is under construction in Armory, Miss. The steel mill has completed its infrastructure expansion and has received environmental approval from the state of Mississippi.

Anshan is the fourth largest steel producing mill in China.

In signing the JV, made on May 13, Anshan says that the agreement will allow the company to learn about the production and running of EAFs, a technology not readily used in China. The company also notes that the steel company will likely benefit from investments generated through the U.S.’s economic stimulus plans.

In announcing the deal, Anshan Steel notes that the investment is the first time a Chinese steel company has invested in a U.S. steel company. The Chinese steel company also announces that it has signed an equipment supply agreement and product sales agreement with the Dao Amory facility.

The company’s move to get a better understanding of the EAF market comes while many of the top iron ore producers are announcing significant price increases for the material. Many Chinese steel mills are reliant on purchasing iron ore on the open market.

The announcement adds that joint venture looks to include the construction of five new U.S. plants.

In an email, Mark Bula, chief commercial officer for Steel Development, comments, “Steel Development looks forward to a long and mutually rewarding relationship with Anshan and our other partners from around the world.  This agreement reflects our continued progress towards financing, constructing and operating state-of-the-art steel mills.”