Wednesday August 20, 02:48 PM
ArcelorMittal buys Brazilian iron mine
PARIS (AFP) - Global steel giant ArcelorMittal (Amsterdam: NSCNL0001MT7.AS - news) said Wednesday it had acquired an iron mine in Brazil for about 810 million dollars (550 million euros), expanding its access to the metal as prices soar.
The company, the world's biggest steel producer, said it bought the London Mining Brasil iron ore mining operation in the eastern state of Minais Gerais for around 764 million dollars from London Mining, listed in Oslo.
Under the deal, ArcelorMittal also takes on loans worth 46 million dollars, bringing the total price it pays for the venture to 810 million, it said in a statement announcing the deal on Wednesday.
It said London Mining Brasil covered areas estimated to have more than a billion tonnes of iron ore.
The mine is aiming to expand its ore production from 1.4 to 3.2 million tonnes a year by 2009 and ArcelorMittal said it would consider investing to boost it further to 10 million tonnes a year.
As iron prices have soared, ArcelorMittal has expanded its own iron holdings in recent months, notably buying a 49 percent share in the Brazilian miner MPP this month.
"The acquisition of London Mining Brasil along with our investment in MPP... ensures that our iron ore base is further diversified in the face of tighter supply for raw materials," said Aditya Mittal, ArcelorMittal's chief financial officer, in the statement.
The group said it had also reached an agreement with the Canadian-based Adriana Resources Inc (ADI.V - news) . to develop a port in the Brazilian state of Rio de Janeiro for shipping the ore.
ArcelorMittal stocks rose 2.13 percent to 51.32 euros in early trading Wednesday on the Paris stock exchange.
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