CSC Ties Up With Shougang Group to Invest in Overseas Mines

Taipei, June 13, 2011 (CENS)--China Steel Corporation (CSC), Taiwan's largest integrated producer of steel products, has deepened strategic partnership with Shougang Group of mainland China to jointly invest in overseas mines.

The alliance with Shougang Group will help CSC enhance competitiveness in China as it has stretched arms to northern Chinese market. This is the first time for the leading steelmakers across the Taiwan Strait to engage in technical exchange.

With annual sales amounting to 150 million renminbi, or NT$663.24 billion, Shougang is one of China's top-five steel conglomerates. To cope with national policy to encourage integration of domestic steel firms, over the past few years Shougang has expanded presence in China by establishing steel mills in the capital of Beijing, Hebei, Shanxi, Guizhou provinces and Xinjiang Uyghur Autonomous Region, with aggregate annual production capacities reaching 30 million metric tons of steel products.

CSC and Shougang have had talks focusing on collaboratively investing in mines and the issue of environmental protection in steelmaking process.

An industry insider said steelmakers around the world are striving to acquire rights to develop mines so that they can control sources of such raw materials as iron ores whose prices have been hiked over the past few months.

CSC executive vice president C.L. Tu noted steel firms have to cooperate with each other to access mine resources abroad. So far, CSC has cemented strategic relations with China's leading steelmakers, including Shougang, Angang Steel, Wuhan Steel, and Baosteel.

CSC has pledged to expand investments in mines in the next five years, so as to control 30% consumption of iron and coal ores, compared to only present 20%.

As environmental-protection awareness in China has been on the rise, Shougang has expressed strong interest in learning pollution-control technologies from CSC. On the opposite, CSC will be able to slash production costs by over 30% if it acquires cost-effective production skill from Shougang.