ArcelorMittal to sell $1.1 bn stake in Canadian iron ore mine to Posco, China Steel

ArcelorMittal, the world's biggest steelmaker, will sell a 15 per cent stake in its Canadian iron ore mine to a consortium of South Korean steelmaker Posco and China Steel Corp for $1.1 billion, the Taiwan-listed China Steel said in a statement.

ArcelorMittal, battling sluggish steel demand, is looking to offload a 15 per cent stake in Canada's Labrador Trough iron ore mining and infrastructure as part of a process to cut debt.

Under the agreement, ArcelorMittal Mines Canada along with Posco and China Steel will form a joint venture that will own Labrador Trough. They will also enter into long-term iron ore supply agreements, China Steel said in its web site release.

For Posco, the world's fourth-biggest steelmaker, which already owns a 12.5 per cent stake in Australia's Roy Hill project, the deal with ArcelorMittal will give access to both iron ore and coal used to make steel.

China Steel and Posco would jointly contribute $540 million, while the remainder is expected to come from financial investors, including the National Pension Service, South Korean wire service Yonhap Infomax reported.

The transaction is subject to approval from the Taiwanese government, and is expected to close in two installments in the first and second quarters of 2013, the statement said.

ArcelorMittal, formed in 2006 after India-born Lakshmi Mittal's steel business bought European peer Arcelor for $33 billion, is battling sluggish steel demand.