ArcelorMittal in talks to buy Brazil’s MMX iron ore assets
04 Aug 2010
ArcelorMittal, the world's biggest steelmaker yesterday said that it is in talks to buy the iron ore assets of Brazil's MMX Mineracao e Metalicos SA (MMX) as part of its plan to be self sufficient in the mineral required for making steel.
Reacting to Brazilian media reports, ArcelorMittal confirmed that it was in talks with MMX, controlled by Brazilian billionaire Eike Batista.
Brazilian newspaper Estado de Sao Paulo, citing sources familiar with the development, reported that the Luxembourg-based ArcelorMittal and US-based Cliffs Natural Resources Inc, both of whom have substantial operations in Brazil, are among the bidders interested in acquiring Batista's 43.5 per cent stake.
The paper also said that Batista is likely to sell the southeast port terminal located in Rio de Janeiro that is operated by his logistics firm LLX.
"We're in talks with MMX on this matter," said Sebastiao Costa Filho, director-president of ArcelorMittal Serra Azul, the steelmaker's Brazil-based iron-ore unit, told Dow Jones Newswires yesterday.
Max Bueno, an analyst with Spinelli SA, a Sao Paulo-based brokerage told Dow Jones that MMX's mine and related assets in Brazil and Chile may be worth around $4.57 billion.
MMX's value will be heightened as miners are seeking to consolidate the fragmented structure of mines and transport infrastructure in the Serra Azul region and ArcelorMittal could be a front runner for the assets located in Serra Azul, as it is a part of a consolidation that's already being discussed in this region, added Bueno.