ArcelorMittal Confirms Acquisition of Wabush Mines
09/06/2007 - ArcelorMittal announces that it will exercise its Dofasco subsidiary’s option to acquire the remaining shares of iron ore and pellet producer Wabush Mines from Stelco and Cleveland Cliffs.
ArcelorMittal has announced that it will acquire iron ore and pellet producer Wabush Mines.
The company is exercising its Dofasco subsidiary’s "right of first refusal" on the Wabush Mines Joint Venture. Dofasco already held 28.6% of the mining venture, but will now acquire the interests of Stelco (44.6%) and Cleveland Cliffs (26.8%) on the same terms as those previously offered by Consolidated Thompson (June 6th, 2007).
As a result of Dofasco’s purchase, ArcelorMittal will own 100% of the mining company, which has a yearly pellet production of approximately 4.8 million tonnes. The company’s mine and port operations are close to those of QCM (Québec Cartier Mines), a mining subsidiary of Dofasco.
“The acquisition of Wabush Mines and facilities will enable us to exploit the synergies with the Group's existing QCM operations to increase overall pellet production in the medium term by about 3.5 million tonnes per year,” said Malay Mukherjee, member of ArcelorMittal's Group Management Board in charge of Mining. “This will bring ArcelorMittal closer to its stated objective of 75% iron ore self-sufficiency”.
Terms for Dofasco’s purchase include a cash element of around US$67 million and certain liabilities. The transaction, which is subject to regulatory approval, is expected to be finalized by December 2007.
ArcelorMittal is the world's largest steel company, with 320,000 employees in more than 60 countries. The company leads a number of major global markets, including automotive, construction, household appliances and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks. An industrial presence in 27 European, Asian, African and American countries exposes the company to all the key steel markets, from emerging to mature, positions it will be looking to develop in the high-growth Chinese and Indian markets.
ArcelorMittal’s key pro-forma financials for 2006 show combined revenues of USD 88.6 billions, with a crude steel production of 118 million tonnes, representing around 10% of world steel output.
Located in northeastern Canada, Wabush Mines produces concentrates at its Scully mine in Wabush (Newfoundland & Labrador), which is then transported by rail to the Pointe Noire pelletizing and port facility located on the St. Lawrence River.
