TOKYO: A consortium of Japanese and South Korean companies Friday agreed on a deal to take a $1.95 billion 15 percent stake in a Brazilian metal miner, the Japanese firms said.
Nippon Steel, JFE Steel, and trading house Sojitz as well as the state-owned Japan Oil, Gas and Metals National Corp. will join forces with South Korea's Posco and the country's National Pension Service (NPS).
Companhia Brasileira de Metalurgia e Mineracao (CBMM) mines niobium, a metal crucial to the production of high-grade steel for automobiles and other products.
The Japanese companies will take a combined 10 percent stake and the remaining five percent, worth $650 million, will be taken up by Posco and the NPS, a statement released by the Japanese firms said.
CBMM produces 82 percent of the world's niobium.
"This investment in such a significant supplier of niobium comes at an opportune time and has real strategic value to the companies of the Japanese and the Korean consortium," the statement said.
The deal comes as Japan looks to diversify its supply of key minerals and as a strong yen makes overseas investments relatively good value.
It is also looking to increase the spread of rare earth supplies for its high-tech industries -- ranging from computer components to hybrid cars -- as China, which controls more than 90 percent of global supply, tightens its export quotas.
China is building strategic reserves of rare earth metals, while the Japanese and South Korean governments say they have amassed some reserves and US analysts have called for a similar effort.
In February, Japan said it would cut its reliance on imports of key Chinese rare earth metals by roughly a third.
Comments
Comments are closed for this article.