Shanghai: ArcelorMittal, the world’s top steelmaker and China’s Hunan Valin Group will accelerate a strategic partnership for the production of high-end steel products in China and iron ore purchases, the companies said in a joint statement.
Valin Group and ArcelorMittal “will further improve technical cooperation. Both parties will push ahead the construction of the auto sheet and electrical steel projects as planned,” the companies said in the statement.
ArcelorMittal owns a stake in Valin Steel , the Shenzhen-listed unit of Valin Group.
To help Valin Steel lower production costs, ArcelorMittal will share with the Chinese company its technical know-how, the statement said.
The two companies will also move forward to explore the possibilities of establishing a long-term partnership to help Valin Steel in purchasing iron ore, a key steelmaking ingredient, on the global market, it said.
The statement, issued late on Thursday by Valin Steel, came after the China Iron & Steel Association and the local securities regulator in Hunan said that ArcelorMittal failed to fulfill its commitment to provide Valin with the technical support needed for their joint venture auto sheet plant as well as help for securing supplies of iron ore.
ArcelorMittal agreed to set up the steel auto sheet joint venture with Valin and its listed arm Hunan Valin Steel Co more than three years ago.
The plant, 33% owned by ArcelorMittal, was approved by regulators last year.
ArcelorMittal had said it would provide technical support for the Chinese steel mill and its subsidiary Lianyuan Steel, which will be responsible for producing hot-rolled coil as a raw material for the new sheet plant.
As part of its efforts to advance the tie-up, ArcelorMittal agreed to sell its 12% stake in an auto sheet joint venture with China’s Baosteel and Japan’s Nippon Steel to the Japanese firm to focus on the Valin project.