ArcelorMittal to buy stake in Guinea iron ore project

BRUSSELS Fri Aug 1, 2014 6:56am EDT

Related Topics

BRUSSELS Aug 1 (Reuters) - ArcelorMittal, the world's largest steelmaker, said on Friday it had signed deals to purchase stakes in an iron ore project in Guinea as it pushes to raise its mining output and leverage its existing presence in the region.

ArcelorMittal said in a statement that it would buy a 43.5-percent stake in Euronimba Limited from Billiton Guinea, a unit of BHP Billiton , and a 13-percent stake from Compagnie Francaise de Mines et Metaux, a unit of Areva .

Euronimba holds a 95-percent indirect interest in the Mount Nimba iron ore project, a deposit with an estimated 935 million tonnes of direct shipped ore (DSO) with an average grade of 63.1 percent of iron. DSO needs only relatively simple crushing and screening before it can be used to make steel.

The site is about 40 kilometres (25 miles) from ArcelorMittal's mine in Liberia.

The company should be able to use its Liberian railroad and port facilities, meaning that its capital expenditure would be much lower than otherwise the case, Chief Financial Officer Aditya Mittal said.

He added that approval for exporting ore from Guinea to Liberia was critical to the acquisition.

The deals would give ArcelorMittal 56.5 percent of Euronimba and Newmont LaSource the remaining 43.5 percent, but ArcelorMittal has granted Newmont the option of owning equal stakes.

ArcelorMittal did not give financial details, but said the deal was subject to certain conditions, including merger control clearance and approvals from the government of Guinea.

Asked about possible interest in the Simandou iron ore mining project in southeastern Guinea, Mittal said:

"Mount Nimba is very interesting because it is close to our existing operations. It is 40 kilometres away, almost like an adjacent deposit. Simandou is much further away. Reading between the lines, you get a sense of our interest level." (Reporting by Philip Blenkinsop; editing by Jason Neely)

FILED UNDER:
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

Find your dream retirement town

Florida? Hawaii? Reuters has teamed up with Zillow to give you the power to customize a list of your best places to retire.  Video | Full Article