Brazilian mining company Companhia Vale do Rio Doce (CVRD) signed an exclusive, long-term iron ore supply agreement with Germany's ThyssenKrupp on Friday, committing to deliver 8.6 million tonnes annually over 15 years, for a total of 129 million tonnes.
The deal surpasses CVRD's previous record contract, a 120-million-tonne arrangement with Arcelor Mittal, making this the largest supply agreement in the company's history. Iron will go to Atlantic Steel Company (CSA), a ThyssenKrupp subsidiary planned for Rio de Janeiro.
CVRD will hold a 10 percent stake in CSA, with ThyssenKrupp retaining the remainder. CSA is expected to begin production in the first half of 2009, targeting output of 5 million tonnes of steel per year for export to Europe and North America.
CVRD chairman Roger Agnelli noted that the new contract brings the company's total annual iron supply to ThyssenKrupp to 23.6 million tonnes. Under current market conditions, Agnelli projected the deal could generate roughly 500 million dollars in annual revenue for CVRD.
Historical summary. TurkishPress restated this wire report, first published in November 2006, in its own words.