Steel firm says Chinese investment not a risk

WASHINGTON (BestGrowthStock) – Steel company Steel Development on Tuesday dismissed concerns raised by lawmakers over an investment from China’s state-owned Anshan Iron and Steel Group (ASISG.UL: ) in one of its steel mills.

“With Steel Development projecting production of 350,000 tons of rebar per year in a 120 million ton steel market (less than three-tenths of a percent), the promotion of national security fears due to the Anshan investment is, at best, difficult to rationalize,” the company said in a statement.

Last week, 50 members of the Congressional Steel Caucus urged U.S. Treasury Secretary Timothy Geithner in a letter to investigate whether Anshan’s investment should be blocked on national security grounds.

Geithner chairs the Committee on Foreign Investment in the United States (CFIUS), an interagency panel that reviews foreign investments and can recommend to the president that certain deals be blocked.

Ahshan announced in May it would invest in a $175 million steel mill that Steel Development is building in Amory, Mississippi.

Steel Development, a privately-owned U.S. company, acknowledged it has “come under fire from incorporating this investment from Anshan.”

However, it said it had no plans to abandon the project “notwithstanding the extensive political pressure applied by certain members of Congress and other steel producers seeking to impede competition.”

The bipartisan group of lawmakers said last week they were worried that Anshan could gain “access to new steel production technologies and information regarding American national security infrastructure projects” through the investment.

Steel Development said it does not normally identify its investors.

“However, due to unfounded concern regarding controlling interests in our company, we confirm that Anshan contributed less than 20 percent of the total investment in Steel Development,” the company said.

(Reporting by Doug Palmer; Editing by Cynthia Osterman)

Steel firm says Chinese investment not a risk