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China's HBIS Group signs MOU for US$4.4B Philippine steel project

China's HBIS Group Co. Ltd. signed a memorandum of understanding for a US$4.4 billion integrated steel project in the Philippines, which is expected to eventually produce 8 million tonnes of steel per year, Reuters reported Dec. 17, citing Chinese state media reports and a statement from the Philippines' Department of Trade and Industry.

According to the statement, the project will be the country's first integrated steel complex and represents the biggest ever industrial investment from China in the Philippines. Amid Beijing's crackdown on pollution, HBIS and other producers have had to look for higher production abroad.

The facilities in the complex will include sintering, coking, pelletizing and steel-rolling to produce basic iron and steel products for further processing.

The project is expected to produce 4.5 million tonnes of hot-rolled coil and 600,000 tonnes of slab annually in the US$3 billion first phase, with output reaching 8 million tonnes per annum in the second phase. Overall construction and ramp-up are scheduled to take three to five years.

In addition to HBIS, Chinese private equity firm Huili Investment Fund Management Co. Ltd., Philippine rebar producer Steel Asia Manufacturing Corp. and Manila-owned Phividec Industrial Authority also signed the memorandum.