ArcelorMittal eye US coal miner Massey Energy
15 Nov 2010
The world's biggest steelmaker, ArcelorMittal, has reportedly set its eye on buying Massey Energy, if the sixth largest coal producer in the US agrees to sell itself, The Wall Street Journal today reported citing people familiar with the matter.
With 47 coal mines located in Southern West Virginia, Eastern Kentucky, Southwest Virginia and Tennessee, Massey, based in Richmond, Virginia, is the largest coal producer in Central Appalachia region, with 2.3 billion tons of proven and probable coal reserves, of which, more than 1.3 billion tons is metallurgical coal that is used to produce steel.
Luxembourg-based ArcelorMittal, which had said in September 2010 that it will further develop its coal assets by reviewing opportunities in new frontiers, has started initial stage discussions a few months ago on a possible deal, said the paper.
The takeover talk comes amid Coal India's negotiatons with Massey Energy to buy its coal mines or take stakes in order to bridge the growing coal shortage in the country. (See: Coal India in talks with Peabody, Massey for coal mines)
The Massey board's annual strategic-planning meeting is scheduled for next week, where it is likely to reach a consensus on whether to sell itself or remain independent.
Alpha Natural Resources Inc, the fourth largest coal producer and the largest metallurgical coal producer in the US has already made an informal takeover offer early this month for Massey.