Kobe Steel to build plant with Steel Dynamics

Japan’s Kobe Steel Ltd said on Wednesday Steel Dynamics Inc would build a commercial-scale reduced iron plant in the United States, using its technology for producing steel from low-priced iron ore and coal in small mills. It will be the first such plant built using Kobe’s ITmk3 technology.

 

Kobe, Japan’s fourth-biggest steel maker, said the project with Steel Dynamics would cost 26 billion yen in total, and the plant in Hoyt Lakes, Minnesota, will start operations in mid-2009 with an annual output of 500,000 tonnes. A joint venture, Mesabi Nugget Delaware, LLC, will construct and operate the first ITmk3 commercial plant and will produce and sell the iron nuggets, Kobe Steel said in a statement.

 

Steel Dynamics will invest $85 million in the venture, holding an 81 percent equity share, while Kobe Steel will invest $20 million for a 19 percent share, it said. Steel Dynamics will manage the construction of the facility and operate it. Kobe in June licensed this technology to Cleveland-Cliffs Inc of the United States. In May, it said it was in talks with India’s Chowgule Group on licensing the technology. Shares of Kobe Steel fell 4.6 percent to 332 yen, underperforming a 2.5 percent fall in the overall market.

This entry was posted on Thursday, November 22nd, 2007 at 10:44 am and is filed under Metals News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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