(Corrects size of new mill in second paragraph and closes share price in fifth paragraph.)
Usinas Siderurgicas de Minas Gerais SA (USIM5), Brazil's second-largest steelmaker, more than doubled its planned investment over the next decade to $8.4 billion to boost domestic steelmaking capacity by 41 percent.
The board approved a plan yesterday to invest $4.7 billion to expand production by 2.2 million metric tons at its Ipatinga mill in the Brazilian state of Minas Gerais and build a new mill that will produce 3 million tons a year, Belo Horizonte, Brazil- based Usiminas said today in a government filing.
Chief Executive Rinaldo Campos Soares, who previously announced $3.7 billion in investments, is seeking to expand steel output by almost half in order to boost exports and meet rising demand from Brazilian shipbuilders and automakers.
``We are the leaders in automotive steel and flat steel; we want to maintain that leadership,'' Soares, 68, told reporters in Sao Paulo. ``Without this expansion we can't deliver one kilogram more to our customers.''
The company's preferred shares, its most-traded class of stock, fell 5 centavos, or 0.1 percent, to 87.31 reais in Sao Paulo trading.
The new mill, which may be located in Cubatao, a city near the Port of Santos, Latin America's largest, may start producing as early as 2014 if Brazil's economy grows at 3 percent or more a year, Soares said. The company may speed up construction and open the plant earlier if growth exceeds its forecast of about 3.5 percent through 2011, he said.
The company aims to finish the expansion of its Ipatinga mill by 2010 or 2011.
The board approved an initial $3.1 billion plan in December 2005 to expand Cubatao and its Ipatinga steel complex. Usiminas later approved $600 million for an Ipatinga steel rolling mill that turns raw steel into higher-value products used by automakers and other manufacturers, Soares said.
Usiminas, which is controlled by a group that includes Japan's Nippon Steel Co. and Cia. Vale do Rio Doce, has 60 percent of Brazil's automotive steel market and 52 percent of the market for flat steel, which is used in auto bodies, beverage cans and appliance cases, he said.
The company also said today it will seek a $240 million loan from the Japan Bank for International Cooperation and a $300 million, three-year line of credit.
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