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Befesa enters in the steel waste recycling market in Turkey

September 28, 2010

• Through the acquisition of a joint venture investment of 51 % in a steel dust recycling plant in Iskenderun, Turkey.
• The deal, which requires an investment of $10 million, includes developing the steel recycling business in the country.

Erandio, 28 September 2010. Befesa has signed a joint venture agreement with the Canadian company Silvermet Inc. to take a 51 % stake on a steel dust recycling plant that Silvermet owns in Iskenderun (Turkey), with a total investment of US $10 million, and which will also involve the acquisition of a 10 % stake in Silvermet.

The deal will be implemented through a jointly owned Spanish company (Befesa Silvermet Turkey, S.L.) that is 51 % owned by Befesa, with 49 % held by Silvermet. In addition to the plant, the transaction also includes an investment agreement to jointly develop the steel dust recycling business in Turkey, one of the world’s largest steel producers.

Closing is subject to TSX-V approval and other customary conditions and is expected to occur in November.

One of the objectives of Befesa Silvermet Turkey S.L. will be to expand its presence in the Turkish steel sector through the development of new technologies to process electric arc furnace dusts (EAFD).

Befesa is the largest manager of EAFD in Europe, with four Waelz kiln facilities that treat 500,000 tonnes per year and it is a global leader in technological innovation in the processing of EAFD to recover zinc. Befesa also has extensive experience in upgrading and building Waelz kilns that process EAFD.

“This transaction allows us to quickly position ourselves in Turkey, a country that is extremely important in the sector and the seventh largest producer of steel in the world, as well as one of the leading steel producers using electric arc furnaces”, said Javier Molina, chairman of Befesa.

About Silvermet:

Silvermet’s Waelz kiln facility in Iskenderun, Turkey, has been operating since May 2009 to process the EAFD produced by local steel mills. Silvermet produces a zinc oxide concentrate from the EAFD which is sold to smelters around the world.

About Befesa:

Befesa Medio Ambiente (BMA) is an international company that provides solutions for managing and recycling industrial waste and for water generation and management, with a strong emphasis on social responsibility to help create a sustainable world. (www.befesa.com).