Harsco, TISCO Ink 25-Year JV Agreement in China

Harsco Corp. and China's Taiyuan Iron & Steel Co. Ltd. (TISCO) have announced the establishment of a 25-year joint venture relationship that will address the processing and metal recovery of TISCO's stainless and carbon steel slag production by-products across a range of potential commercial applications.

In a release, Harsco notes that the 25-year partnership is the largest joint venture in either company's history. Harsco anticipates that the joint venture, to be called TISCO Harsco Environmental Protection Enterprise Co. Ltd., has the potential to generate new revenues of about $30 million per year initially, ramping up to a projected run rate of between $50 million-$60 million per year when fully operational.

Harsco will have a 60 percent share in the joint venture, with TISCO controlling the remaining 40 percent. The two companies have agreed to jointly commit capital estimated to be in the area of a 1-to-1 ratio to the projected revenues. The joint venture is expected to process as much as 1 million tons of stainless steel slag and up to 500,000 tons of carbon steel slag per year.

While the joint venture agreement has been executed, the parties are in further discussions on a final accord on the definitive agreements with respect to operations, technology licensing and land leasing, as well as obtaining final Chinese government approval.

Harsco expects the final points to be completed in the first half of 2011, and the joint venture will begin operations in early 2012.

"This is a landmark step in Harsco's continuing evolution as a comprehensive environmental solutions provider to the steel and metals industries," says Salvatore Fazzolari, chairman, president and CEO of Harsco Corp. "We are embarking as dedicated joint partners on a major journey that has enormous potential for long-term collaboration, innovation and benefit, both to our partnership and to the greater environment throughout this region of China."

"I share fully with Mr. Fazzolari's vision for the project. Our relationship will help TISCO achieve its goal of zero waste discharge and in building itself into a model business among all steel makers in China in protecting the environment and contributing to the building of a truly and totally recycled economy,” adds Li Xioobo, chairman of TISCO.

According to the Harsco release, TISCO, with annual stainless steel production of two million tons, is the largest stainless steel flat products in the world.