Arcelor Mittal may buy mines to boost iron ore supply
Thursday, 24 December 2009
LONDON, Dec 23 (Bloomberg): Arcelor Mittal, the world's biggest steelmaker, may buy more mines in 2010 to increase its supply of iron ore as prices for the raw material used to make the metal are expected to rebound.
Acquisitions "will be part of the mix next year," Bill Scotting, Arcelor Mittal's head of strategy, said. Expanding mines and developing projects will also be part of its drive to be more self-sufficient, he said. The Luxembourg-based company supplies about half its iron ore needs and plans to raise the share to 75 per cent to 85 per cent by 2014, he said.
Lakshmi Mittal, Arcelor Mittal's chief executive officer and 41 per cent shareholder, has added mining assets in Brazil and Russia since Mittal Steel Co. bought Arcelor SA in 2006 in the steel industry's biggest takeover. His strategy of adding raw material supplies, which helped swell Arcelor Mittal's debt to as much as $32.5 billion in 2008, may be vindicated next year as iron ore and coking coal prices gain.
"Arcelor Mittal is really setting its self aside from the rest of the European steel industry by focusing on vertical integration," said Gavin Wood, an analyst at Nomura Holdings Inc. in London who has a "buy" recommendation on ArcelorMittal's stock.
Acquisitions "will be part of the mix next year," Bill Scotting, Arcelor Mittal's head of strategy, said. Expanding mines and developing projects will also be part of its drive to be more self-sufficient, he said. The Luxembourg-based company supplies about half its iron ore needs and plans to raise the share to 75 per cent to 85 per cent by 2014, he said.
Lakshmi Mittal, Arcelor Mittal's chief executive officer and 41 per cent shareholder, has added mining assets in Brazil and Russia since Mittal Steel Co. bought Arcelor SA in 2006 in the steel industry's biggest takeover. His strategy of adding raw material supplies, which helped swell Arcelor Mittal's debt to as much as $32.5 billion in 2008, may be vindicated next year as iron ore and coking coal prices gain.
"Arcelor Mittal is really setting its self aside from the rest of the European steel industry by focusing on vertical integration," said Gavin Wood, an analyst at Nomura Holdings Inc. in London who has a "buy" recommendation on ArcelorMittal's stock.