SIMPAC, Brazil's RIMA to set up ferrosilicon joint venture

SIMPAC Inc., a South Korean ferroalloy producer, said on Monday that it will establish a joint venture with Brazilian silicon alloy manufacturer RIMA Industrial SA to produce ferrosilicon

SIMPAC, listed on the Korea Exchange, signed an agreement with RIMA Group in São Paulo, Brazil, on July 31 for the co-production of low-carbon, high-purity ferrosilicon.

SIMPAC will invest $10 million to secure a 50% stake in the joint venture, named Silbraco with a plan to supply at least 2,000 tons of low-carbon, high-purity ferrosilicon to the domestic market monthly.

RIMA Group, a leader in Brazil's silicon alloy market, will make a $10 million in-kind investment in the venture.

Ferrosilicon is categorized into general, high-purity and low-carbon high-purity types, depending on titanium content and silicon ratio.

General ferrosilicon is used as a deoxidizer in steel production, while high-purity and low-carbon high-purity ferrosilicon are essential materials for electrical steel sheets used in generator cores and electric vehicle motor cores.

SIMPAC has expanded into the ferroalloy market after acquiring the ferrosilicon division of POSCO M-Tech Co. in 2019 and is the sole high-purity ferrosilicon manufacturer in South Korea.

Since 2020, it has been working with RIMA Group to produce low-carbon, high-purity ferrosilicon, a crucial material for electrical steel sheets used in EV motor cores.

"With the spread of eco-friendly practices and electric vehicles, global demand for ferrosilicon, used as a deoxidizer in steel production processes and as a material for electric vehicle motor cores and electrical steel sheets, is rapidly increasing," said a SIMPAC official.

"In a situation where China monopolizes 70% of the global silicon market, it is urgent to secure an independent supply chain for the sustainable growth of various industries, including electric vehicles," he added.

Write to Hyung-Chang Choi at [email protected]