Public prosecutor files lawsuit against Ternium's steel mill at Açu port

The Rio de Janeiro public prosecutor's office has filed a lawsuit with a state court calling for the suspension of the environmental permit for Luxembourg-based Ternium's (NYSE: TX) steel plant at the Açu port complex, news service Agência Brasil reported. The prosecutor's office claims there were irregularities in the licensing process and in the environmental impact study (EIS). The legal action also targets state environment authority Inea which issues environmental permits. The production of steel at the facility involves the use of coking coal which will release large quantities of benzene, a known carcinogen, into the atmosphere, according to the report. "The environmental impact study suggests the use of conventional technology, but nowadays there is technology that is less contaminating than conventional coke," public prosecutor Vinícius Lameira was quoted as saying. The prosecutor's office is also concerned about possible environmental damage to the area surrounding the facility, which is home to a 1,300ha nature reserve. Both Ternium and Inea issued statements saying they had not been officially notified about the lawsuit. Ternium also said the design of the steel plant complies with the country's standards. The public prosecutor is expecting a court decision on Wednesday (Apr 18), according to the report. Ternium has secured US$500mn in tax breaks to build the steel mill which will require a total investment of US$5bn-6bn, according to previous reports. The complex will produce up to 8.4Mt/y of crude steel and the project involves a pelletizing plant and an integrated steel plant to produce plates and laminates. The Açu port complex will be a mixed-use private terminal with estimated capex of 4.3bn reais (US$2.38bn) and is divided between LLX Minas-Rio and LLX Açu, which will invest 1.9bn reais and 2.4bn reais, respectively. Located in São João da Barra city in the north of the state, the harbor will have a depth of 21m. It is expected to start operations by end-2012. LLX is part of local tycoon Eike Batista's EBX group.