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Understand Why The Steel Giant Gave Up On A New Factory Abroad And Is Investing In Mining In Brazil A Plan Of R$ 6 Billion In Minas Gerais To Strengthen Its National Operation
In recent months, a story about Gerdau selling a factory in Mexico to fund its projects in Brazil has gained traction. However, the reality is different and even more strategic. The steel giant has actually canceled a major investment of US$ 600 million in Mexico and is simultaneously accelerating its investments in mining in Brazil, in a move that reinforces its commitment to the domestic market.
This decision is part of a global reorganization of the company’s portfolio. Instead of risking a new and expensive project abroad, Gerdau chose to strengthen its operations at home, consolidating control of high-value assets and heavily investing in raw material self-sufficiency.
The Turning Point In Mexico, The Cancellation Of The US$ 600 Million Project
The most impactful decision from Gerdau was announced in May 2025: the cancellation of a plan to build a new special steel plant in Mexico. The project, estimated at around US$ 600 million (approximately R$ 3 billion), was shelved due to a combination of factors.
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According to the company’s CEO, Gustavo Werneck, the uncertainties surrounding steel import tariffs imposed by the United States and a “profound reconfiguration” in the automotive industry’s supply chain made the investment risky. The logic was pragmatic: instead of building a new plant in Mexico, it would be more prudent and cost-effective to utilize the idle capacity that the company already has in its plants in the U.S. to meet demand.
The Consolidation In Brazil, The Purchase Of The Partnership With Sumitomo
While canceling a project abroad, Gerdau was strengthening its position in Brazil. In a transaction that may have contributed to the confusion of information, the company bought out its Japanese partners, including Sumitomo Corporation, in the Gerdau Summit joint venture located in Pindamonhangaba (SP).
The deal, valued at US$ 32.6 million and completed in February 2025, gave Gerdau 100% control of the unit, which produces high-value components for various sectors. The message was clear: less risk in volatile international markets and more control over profitable and strategic operations in the domestic market.
The R$ 6 Billion For Minas Gerais, The Future Of Mining Investments In Brazil
The focus on Brazil is evident in Gerdau’s robust investment plan for Minas Gerais, its main production hub. The company is executing a plan for R$ 6 billion in CAPEX, with the largest contribution of R$ 3.2 billion directed towards the expansion of its iron ore mine in Miguel Burnier.
This project is the centerpiece of the investments in mining in Brazil. The goal is to achieve self-sufficiency in high-quality iron ore, with a content of 65%, which makes steel production more efficient and less polluting. The expansion will ensure supply for Gerdau’s plants for 40 years and utilizes cutting-edge technology, such as dry stacking of tailings, which eliminates the need for dams.
A Clear Strategy, Less Risk Abroad, More Strength At Home
The three moves, although seemingly disconnected, are part of a cohesive and well-defined strategy. By canceling the expensive project in Mexico, Gerdau avoided a significant financial and geopolitical risk. By acquiring the entirety of Gerdau Summit, it consolidated control over a high-value asset at home.
And by accelerating investments in mining in Brazil, the company secures its raw material, increases its competitiveness, and reduces its environmental impact. The message to the market is strong: in an uncertain global scenario, Gerdau’s bet is on the strength, stability, and growth potential of its Brazilian operations.
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