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ArcelorMittal to buy Brazilian mining company
Friday, 22 August 2008, 16:14 IST
Luxembourg: ArcelorMittal, the world's leading steel company, Wednesday said it has agreed to buy the iron ore mining company London Mining Brasil for $810 million.
The transaction includes the assignment of inter-group loans from London Mining of approximately $46 million.
London Mining Brasil is an iron ore miner located in the Iron Quadrangle in the state of Minas Gerais, about 65 km from the city of Belo Horizonte in Brazil.
It mainly focuses on the exploration, development and production of iron ore resources in the region.
ArcelorMittal said London Mining Brasil's mines contain an estimated 1,059 million tonnes of iron ore reserves.
The mining company is in the process of expanding its production of iron ore concentrate and lump ore from 1.4 million tonnes per annum to 3.2 million tonnes in 2009 due to the operation of a recently commissioned sinter feed plant.
Subject to further technical analyses, ArcelorMittal will consider investing up to $700 million to increase production in the medium term to in excess of 10Mtpa.
ArcelorMittal also reached an agreement with Canadian-based Adriana Resources for the development of an iron ore port facility in the state of Rio de Janeiro in Brazil.
The port is located in Mangaratiba city, and will be constructed on land acquired by Adriana in January 2008.
ArcelorMittal intends to use its share of the port's capacity to export iron ore from London Mining Brasil mines to its steel facilities in the Atlantic basin.
"This is another important investment in the dynamic Brazilian market," said ArcelorMittal chief financial officer Aditya Mittal.
"The acquisition of London Mining Brasil along with our investment in MPP - Mineracao Piramide Participacoes Ltda - ensures that our iron ore base is further diversified in the face of tighter supply for raw materials.
"In addition, the planned port facility at Sepetiba Bay in Brazil is the ideal captive solution to deliver access to the export market for ore from the Iron Quadrangle region," he added.
Source: IANS
Source: IANS