SAO PAULO, Brazil (AP):

Brazil's state-owned National Development Bank will significantly boost lending to steel makers through 2011, shelling out US$7.6 billion (€5.9 billion) to help double steel production capacity, the bank said Monday.

The amount is more than triple the US$2.2 billion (€1.7 billion) that the bank provided to steel makers from 2001 through 2005, and will help them increase output to 72 million metric tonnes (80 million tons) per year, up from the current capacity of 36 million tonnes (40 million tons).

Competitive cost of producing steel

"The expectations for a strong increase in investments are primarily because of the highly competitive cost of producing steel in Brazil," the bank said in a statement.

Brazil's biggest steel makers are Arcelor Brasil SA, Companhia Siderurgica Nacional SA, Gerdau SA and Usinas Siderurgicas de Minas Gerais SA.

Demand has been especially high from China for Brazilian steel in recent years.

While the bank said it would provide the funding, not all the companies have approved business plans that would result in Brazil doubling its steel output.