ArcelorMittal (MT), the World's Largest STEEL company, continues to grow its IRON ORE reserves and steel-related operations in Brazil. Two weeks ago, the company announced that it was spending $1.6 Billion in order to increase its long carbon steel production in Brazil by 2/3 (from 3.9 million tons per year to 6.5 million tons per year). Today the aggressive company announced another deal in Brazil...this time its an $810 million (includes the assumption of debt) acquisition of Brazilian IRON ORE miner, London Mining Brasil. To summarize, over the past 2 weeks ALONE ArcelorMittal has allocated $2.5 Billion in spending to Brazil.bloomberg.com/apps/news?pid=conewsstory&refer=conews&tkr=MT
Per the Bloomberg link above :
* London Mining's Brazilian unit, London Mining Brasil, is located in the state of Minas Gerais and was acquired by the U.K. company in May 2007 for $89 million
* LMB expanded production of 'concentrate' and 'lump' ore to 3.2 million metric tons a year from 1.4 million tons...ArcelorMittal is expected to invest as much as $700 million to raise output to more than 10 million tons
* London Mining said May 7 that IRON ORE Reserves at its mine in Brazil were 598.8 million tons, compared with a previous estimate of 266.3 million tons
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Anecdotally thinking, this recent IRON ORE acquisition is absolutely consistent with MT's long term 'vertical integration' business strategy of reaching 80% IRON ORE self-sufficiency by 2014. Currently the company's internal iron ore 'attach rate' is around 45%. ArcelorMittal is actively acquiring producers of both IRON ORE and COKING COAL (metallurgical coal) in order to have greater control over its soaring raw material costs. For more information on MT's recent strategic raw material plan, please refer to my 7/27/08 post titled 'ArcelorMittal's $6 Billion Iron Ore Plan'.
Data Courtesy: Bloomberg
Full Disclosure: I own shares of MT.
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