CISA blasts ArcelorMittal for not backing Hunan Valin
2011-08-05 09:19:36 [Print]
Reuters reported that the China Iron & Steel Association has criticized ArcelorMittal for not fulfilling its commitment to support its Chinese partner, the Hunan Valin Group.
Mr Chi Jingdong deputy secretary general of CISA told reporters on Tuesday that ArcelorMittal failed to provide Valin with the technical support needed for their joint venture auto sheet plant in China, and did not fulfill promises to help the Chinese firm secure supplies of iron ore.
He told “ArcelorMittal has not fully met its commitment to Valin in some aspects until now, including iron ore purchases.”
Mr Chi said "Valin encountered some difficulties in production and made losses, so ArcelorMittal's policymakers didn't think this was the right time to build new production lines and temporarily suspended big investment in Valin.”
ArcelorMittal promised to assist Valin Group to buy 3 million tonnes of ore in 2005 and increase volumes in line with Valin's growing demand. But the local securities regulator in Valin's home province of Hunan, upon checking with the Chinese firm, discovered that ArcelorMittal had not helped it source 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. Under the agreement, ArcelorMittal agreed to provide technical support for the Chinese steel mill and its unit Lianyuan Steel, which will be responsible for producing hot rolled coil for the new sheet plant. However, regulators in Hunan said no technical support was made available, and a hot rolling mill built especially for the joint venture ended up making losses of CNY 857 million last year.
Mr Chi Jingdong deputy secretary general of CISA told reporters on Tuesday that ArcelorMittal failed to provide Valin with the technical support needed for their joint venture auto sheet plant in China, and did not fulfill promises to help the Chinese firm secure supplies of iron ore.
He told “ArcelorMittal has not fully met its commitment to Valin in some aspects until now, including iron ore purchases.”
Mr Chi said "Valin encountered some difficulties in production and made losses, so ArcelorMittal's policymakers didn't think this was the right time to build new production lines and temporarily suspended big investment in Valin.”
ArcelorMittal promised to assist Valin Group to buy 3 million tonnes of ore in 2005 and increase volumes in line with Valin's growing demand. But the local securities regulator in Valin's home province of Hunan, upon checking with the Chinese firm, discovered that ArcelorMittal had not helped it source 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. Under the agreement, ArcelorMittal agreed to provide technical support for the Chinese steel mill and its unit Lianyuan Steel, which will be responsible for producing hot rolled coil for the new sheet plant. However, regulators in Hunan said no technical support was made available, and a hot rolling mill built especially for the joint venture ended up making losses of CNY 857 million last year.
