BEIJING (Reuters) - HBIS Group, China’s second-biggest steelmaker, has signed a memorandum of understanding on a $4.4 billion project in the Philippines that will eventually produce 8 million tonnes of steel per year, according to Chinese state media reports and a statement from the Philippines.
The so-called Philippine Iron and Steel Project will be the Southeast Asian country’s first integrated steel complex and represents the biggest industrial investment from China in the Philippines to date, a Dec. 14 statement from the Philippine Department of Trade and Industry said.
The two-phase project, to be located in the province of Misamis Oriental on Mindanao island, will produce 4.5 million tonnes of hot-rolled coil and 600,000 tonnes of slab annually in the $3 billion first phase, according to the statement.
Output capacity will reach 8 million tonnes through a second phase, with the overall construction and ramp-up period slated to span three-five years.
“This project is very important to our industrial development and will allow us to pursue President (Rodrigo) Duterte’s vision of having a globally competitive integrated iron and steel industry,” Trade and Industry Secretary Ramon Lopez said in the statement, which said the project would also create over 20,000 job opportunities.
Jin Yuan, commercial counsellor at the Chinese embassy in the Philippines, described the project as an “important follow-up” to cooperation between the two countries as part of Beijing’s Belt and Road Initiative, according to the state-run China Metallurgical News.
HBIS, based in China’s biggest steel province of Hebei, has been forced to look overseas for production growth as the Chinese government clamps down on new capacity in China for environmental reasons.
Besides HBIS, private equity firm Huili Investment Fund, Philippine rebar producer Steel Asia Manufacturing Corp and the state-owned Phividec Industrial Authority were also signatories to the memorandum.
The facilities in the complex will include sintering, coking, pelletising and steel-rolling, according to the Philippine statement, producing basic iron and steel products for further processing.
Reporting by Muyu Xu and Tom Daly. Editing by Jane Merriman
Our Standards: The Thomson Reuters Trust Principles.