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ArcelorMittal Stocking up on Ferroalloys
12/07/2007 - ArcelorMittal’s agreement to acquire the assets of Central European ferroalloys manufacturer OFZ follows ArcelorMittal’s recent announcement of its entry into a 50/50 joint venture greenfield manganese project with South Africa’s Kalagadi Manganese.
ArcelorMittal has signed an agreement to acquire the assets of OFZ, as, a leading Central European manufacturer of ferroalloys.
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Greenfield Manganese Project in South Africa
ArcelorMittal and South African Kalagadi Manganese recently announced a 50/50 strategic equity partnership that will see the development in South Africa of a manganese mine, beneficiation plant and sinter complex in the Northern Cape Province, and a smelter complex in Coega.
Ultimately, the manganese ore mine and sinter plant at Hotazel are to produce 2.4 million tonnes of sinter product per year. The ferromanganese alloy production facility to be developed in the Coega Industrial Development Zone in Port Elizabeth is to produce 320,000 tonnes/year, which will account for at least 50% of ArcelorMittal's needs.
Drilling to date has confirmed the presence of a high grade manganese ore resource sufficient to support a life of mine in excess of 20 years.
The joint venture transaction is subject to the fulfillment of various conditions, including obtaining necessary regulatory approvals required for implementation of the transaction. The project is due to come on-line in 2010.
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OFZ produces a wide range of ferro-alloys based on manganese and silicon, namely ferromanganese, ferromanganese silicon and ferro-silicon. The company also produces cored wires.
Located in northern Slovakia, the OFZ plant is in close proximity to ArcelorMittal's eastern European mills, including Ostrava and Poland to whom it has historically been a supplier. With six furnaces, OFZ has an annual operating capacity of 150,000 tonnes of ferro-alloys; in 2006, the facility produced 141,000 tonnes of product.
“This acquisition further strengthens our ferro-alloy supply portfolio, following our recent announcement that we had entered into a strategic equity partnership to develop the Kalagadi Manganese's manganese resources in South Africa,” said Aditya Mittal, CFO and member of the Group Management Board of ArcelorMittal. “As the largest consumer of manganese alloys in Europe, we are excited by this opportunity and we look forward to integrating the OFZ operations into the ArcelorMittal group”.
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 billion, with a crude steel production of 118 million tonnes, representing around 10% of world steel output.
