Cliffs Natural to acquire Wabush Mines stake from ArcelorMittal, US Steel
14 Oct 2009
Iron ore and coal miner Cliffs Natural Resources said that it plans to exercise its right of first refusal and acquire US Steel Canada's and ArcelorMittal stake in their three-way Wabush Mines joint venture.
Cleveland-based Cliffs Natural Resources is exercising its right of first refusal to acquire the 73-per cent stake in a joint venture with US Steel Corp and ArcelorMittal SA for $88 million.
On 9 October, Consolidated Thompson Iron Mines Ltd offered to acquire 100 per cent interest in the Wabush Mines joint venture from Luxembourg-based ArcelorMittal, which holds a 28.6-per cent stake, the 44.6 per cent that US Steel Corporation's wholly owned Canadian subsidiary US Steel Canada and Cliffs Natural Resources' 26.8 per cent in Wabush for $120 million.
US Steel Canada's and ArcelorMittal had agreed to the deal, which was subject to Cliffs not exercising its right of first refusal to acquire its partner's interest in the Wabush Mines joint venture on the terms offered by Consolidated Thompson Iron Mines.
Had Cliffs failed to exercise its right of first refusal and did not accept Consolidated Thompson's offer, then Consolidated Thompson would have had a binding agreement to acquire US Steel Canada's and ArcelorMittal collective stake of 73.2 per cent for $87.8 million.
ArcelorMittal, the world's largest steel maker, which was selling its part of the stake for $34.28 million in Wabush Mines, said it was no longer a core part of the company's mining strategy. The mine represented 31 million tons of iron ore reserve and 1.2 million tons of iron ore produced for ArcelorMittal in 2008.