Brazilian miner Vale SA (VALE) late Wednesday said that it has signed a memorandum of understanding with its partner, German steelmaker ThyssenKrupp Steel, to raise its stake in ThyssenKrupp CSA Siderurgica do Atlantico Ltda. (CSA) to 26.87%, from the current level of 10%.

The Brazilian company will pay EUR965 million for the increased stake in the joint venture, it said in a statement.

The deal must still be approved by the boards of Vale and ThyssenKrupp.

CSA is building an integrated steel slab plant, with a nominal capacity of 5 million metric tons per year. The CSA plant is expected to start operations in the first half of 2010. Vale is the sole supplier of iron ore to CSA.

-By Alastair Stewart; Dow Jones Newswires; 5511 2847-4520; alastair.stewart@dowjones.com