Formosa Plastics Group, Taiwan's biggest diversified industrial company, said it plans to buy iron ore from BHP Billiton Ltd., Rio Tinto Plc and Vale SA for a proposed US$8 billion steel factory in Vietnam.
The world's biggest mining companies will supply a combined 12 million metric tons of iron ore a year to the mill, Lee Chih- tsuen, a member of Formosa group's executive board, said by telephone Monday from Taipei. Production may start in three years, he said.
"We've reached initial agreements, without decisions on prices," Lee said.
Formosa Plastics Group, based in Taipei, is constructing a steel mill in Vietnam that will have an annual capacity of 7.5 million tons, Lee said. The company is expanding in Vietnam, where it already produces textiles, to cut costs and tap the Southeast Asian market.
Unit Formosa Plastics Corp. is Taiwan's biggest maker of polyvinyl chloride, or PVC, for construction and consumer goods. The group controls Formosa Petrochemical Corp., the island's only publicly-traded oil refiner.