Vale to build $3.7 bln steel Brazil plant-report

SAO PAULO, Aug 28 (Reuters) - Vale (VALE5.SA)(VALE.N), the world's biggest iron ore miner, will build a $3.7 billion steel plant in Brazil's northern state of Para after being criticized by the government for paring planned investments for this year, a Brazilian newspaper said on Friday.

The government has been pressing the Rio de Janeiro-based company, which was privatized in 1997, to increase its participation in domestic steel industry projects. President Luiz Inacio Lula da Silva lashed out at Vale this year for cutting back on investment and firing 2,000 workers amid the global economic downturn and plunging metal prices.

Para state governor Ana Julia Carepa, a ruling party politician, told newspaper O Estado de S. Paulo that the company had confirmed plans with her office and would sign a letter of intent in coming days.

Work on the Acos Laminados do Para plant, as the facility will be named, should begin in May and end by 2013, Carepa told the newspaper.

Vale will spend $3.3 billion to build the rolled steel plant and set aside $275 million for construction of a port facility and $125 million for a railroad, the paper said.

The plant is expected to produce 2.5 million tonnes a year of rolled steel, of which 2 million tonnes will be sold overseas, Estado said. Spokespeople at Vale didn't return messages left by Reuters seeking comment.

The company is also scheduled to present to representatives of the Espirito Santo state on Friday a plan to build a $3 billion steel factory in the town of Anchieta, Estado said. (Reporting by Guillermo Parra-Bernal; editing by Jim Marshall)