A CHINESE consortium that includes the CITIC Group and Baosteel Group Corp has acquired a 15 percent stake in Brazil's CBMM, the world's largest niobium producer, for US$1.95 billion.

This follows the purchase of a similar-sized stake in CBMM, or Companhia Brasileira de Metalurgia e Mineracao, by a consortium of South Korean and Japanese investors earlier this year.

The Chinese group also includes the Anshan Iron and Steel Group, Shougang Corp and the Taiyuan Iron and Steel Group, Baosteel said in a statement yesterday.

Niobium, which can improve the strength of steel, is mostly used in alloys applied in cars, oil pipelines as well as jet and rocket engines. Brazil holds the world's largest proven niobium reserves.

"From 2002 through 2009, the worldwide demand for niobium posted an annual growth rate of about 10 percent buoyed by growing need for high-grade steel products," the Baosteel statement said, adding global demand for niobium is projected to rise faster than the growth in world crude steel production.

In March, a consortium of four Japanese firms - Nippon Steel, JFE Holdings, Sojitz Corp and Japan Oil, Gas & Metals National Corp - as well as South Korea's National Pension Service and steel mill POSCO, bought a combined 15 percent stake in CBMM for US$1.8 billion.

Source:shanghaidaily