SEOUL/BRUSSELS: Arcelor-Mittal, the world’s biggest steelmaker, will sell a 15 percent stake in one of its Canadian iron ore operations, raising $1.1bn to help pay off debt at a time of sluggish demand.
The group, which makes about 6-7 percent of the world’s steel, will sell the stake in ArcelorMittal Mines Canada to a consortium including South Korean steelmaker Posco and Taiwan-listed China Steel, it said yesterday.
It is the latest in a series of steps to raise funds as slow global economic growth and spending cuts in Europe dampen demand for steel used in the car and construction industry. “It’s one of the more readily disposable parts of the business, and given they need to reduce debt I don’t think its a massive surprise they are selling it,” said Nomura analyst Neil Sampat.
ArcelorMittal wrote down the value of its European business by $4.3bn last month and has had its credit rating cut to non-investment grade by all credit rating agencies. Its net debt rose by $1.2bn during the third quarter to $23.2bon at the end of September.
The World Steel Association in October forecast steel demand would rise 2.1 percent in 2012, down from 6.2 percent in 2011.
ArcelorMittal Mines Canada operates two large open-pit mines in the province of Quebec, where it also owns the Port-Cartier industrial complex that includes a pellet plant, storage areas and port facilities for shipping.
ArcelorMittal also owns the huge Mary River iron ore project in Canada’s arctic, in which it sold a 20 percent stake to joint venture partner Nunavut last month.
AFP
