South Korea's National Pension Service Joins Consortium to Buy Brazil Miner Stake

(March 3, 2011) — A consortium composed of four Japanese companies and two South Korean companies are planning on buying a stake in a Brazilian miner that specializes in scarce metals for $1.95 billion.

The consortium is set to sign a deal to buy a 15% stake in Companhia Brasileira de Metalurgia e Mineracao, the Wall Street Journal reported. The consortium consists of Japanese steelmakers JFE Holdings Inc. and Nippon Steel Corp.; Japanese trading company Sojitz Corp.; government-funded Japan Oil, Gas & Metals National Corp., or Jogmec; South Korea’s National Pension Service; and Posco.

The move illustrates the uptick in mergers and acquisitions activity in the global mining industry this year, as well as rising demand among emerging nations such as China and India for rare metals crucial to high-grade steel production. According to a report by consultants at PricewaterhouseCoopers LLP, $27 billion in mining deals have already been announced in the first month-and-a-half. PwC expects deal sizes to break through the $10 billion mark.

The deal further reflects cooperation between Japan and South Korea to secure natural resources.

“We are interested in investing in the overseas miner as resource assets tend to generate high returns, while Posco wants to secure rare metal as a strategic investor,” NPS told the Financial Times.