ArcelorMittal to spend $4 billion on iron ore security
17 Sep 2010
ArcelorMittal, the $65-billion steel manufacturer plans to spend $4 billion to increase iron-ore production to 100 million metric tons by 2015 in order to become self-sufficient in the raw material required for making steel.
ArcelorMittal, the world's largest steel company plans to expand annual iron ore production to 100 million tonnes by 2015, requiring capital investment of approximately $4.0 billion during the period, the Luxembourg-based company said in its annual investor day presentation that was today held simultaneously in New York and London.
The company's head of mining, Peter Kukielski, said that the target is expected to be achieved through greenfield mines development in West Africa as well as brownfield expansions and efficiency improvements at many of the Group's mines.
The steelmaker is seeking self sufficiency in the raw material after the big three iron ore miners raised prices and switched over to quarterly contract pricing over the annual contracts previously, in March this year from the 40 year-old annual contracts. (See: BHP, Vale wrangle quarterly iron ore deal with Japan, Vale gets 90-per cent hike)
ArcelorMittal, run by billionaire Lakshmi Mittal, has already secured about half its iron ore needs from its iron-ore projects in countries including Brazil, Guinea, Liberia, Russia and Senegal. The company produced nearly 51 million tonnes of iron ore last year.
With captive iron ore assets in Liberia that hold reserves of around 1.5 billion tonne, ArcelorMittal recently discontinued talks with BHP Billiton to combine the two companies' iron ore mining and infrastructure interests in Liberia and Guinea into a single joint venture.
