With falling commodity prices as recession looms, Brazilian miner Vale has secured a long-term customer in Tata Steel Group's UK subsidiary, Corus Group.The deal also helps Corus tie-up long-term raw material supplies through the 5-year iron ore supply contract that would commence in 2009.
Under this long-term contract, which is one of the largest ever signed between a steel maker and an iron ore supplier, Vale will supply approximately 63 million metric tons of iron ore to Corusīs plants over the next five years.
The two companies have forged strong business links that started from the inception of Vale in 1942. Corus regards Vale as a long-term and reliable supplier of high quality iron ore, given its large-scale operations.
Corus CEO Philippe Varin said, "We are pleased to have reached this important agreement with Vale, which strengthens the relationship Corus and Vale have built up over the last 65 years. This contract complements the raw materials strategy for Tata Steel Group's European operations of combining external sources with future captive supplies."
Corus is Europe's second largest steel producer with annual revenues of more than Ģ12 billion and annual crude steel production of about 20 million tonnes. With main steelmaking operations primarily in the UK and the Netherlands, Corus provides innovative solutions to the construction, automotive, packaging, mechanical engineering and other markets worldwide
Tatas are shoring up iron ore supplies with various tie ups, contracts, gathering properties across the world to ensure their supply to their respective factories.
Recently Tata Steel's wholly-owned subsidiary in Singapore, Tata Steel Global Holding Pte Ltd, entered into a binding agreement with New Millennium Capital Corporation of Canada to pick up a 19.9-per cent stake in the company for $22.6 million (Rs106 crore). (See: Tata Steel buys stake in Canadian miner for $22 million)