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ArcelorMittal Spending $1.6B For Brazil Expansion

World’s largest steel maker said Thursday it will spend $1.6 billion to build new steelworks that will supply surging demand in Brazil.

BRUSSELS, Belgium (AP) -- ArcelorMittal SA will spend $1.6 billion to build new steelworks that will supply surging demand in Brazil, the world's largest steel maker said Thursday.

The company will nearly double its Brazilian output of long carbon steel used to make machines and construct buildings to around 6.5 million metric tons a year by mid-2011.

It said increasing its production of wire rod, bars, rebars and structural sections "recognizes the important growth potential of the domestic market" in Brazil.

It is still seeking a site for the new furnaces and steel mills it will build, it said.

ArcelorMittal is also paying $1.2 billion to expand its Monlevade plant in the southeastern state of Minas Gerais.

Construction will employ up to 6,000 people, it said, and the plant will create an extra 400 jobs when it is completed in 2011. It currently has 1,200 workers.

Luxembourg-based ArcelorMittal turns out a tenth of the world's steel and plans to increase steel shipments by more than a fifth by 2012 as it pushes into Latin America, Africa, Eastern Europe, Russia and Central Asia, claiming worldwide demand for steel is "buoyant."

Demand for steel in those regions is booming as their economies expand, calling for more steel to construct buildings, machines and cars -- just as Europe and North America face weaker growth and tougher competition from Asian imports.

Last year, the steel maker pledged to spend up to $1.75 billion to buy out Brazilian specialty steel unit ArcelorMittal Inox Brasil SA, formerly known as Acesita.

The bid for Inox Brazil gives ArcelorMittal total control over both of Arcelor SA's main Latin American units after Brazilian regulators forced it to spend up to 4 billion euros ($5.4 billion) to buy out Arcelor Brasil as part of Mittal Steel Co. NV's multibillion takeover of Arcelor that formed ArcelorMittal.

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