If Mittal is patiently waiting for its Jharkhand and Orissa plans to mature there are good reasons for it. The rise in mineral price world over has given a firm grip over the miner market to just about three companies - Rio Tinto, BHP Billiton and Cia Vale do Rio Doce of Brazil. ArcelorMittal is in search of minerals to establish its own chain of ore supply.
India is not its only choice. The company is slated to reopen the operations of the Nimba iron-ore mine in Yekepa, Liberia in 2009, a mine that was abandoned in 1992 when civil war engulfed the nation. In addition, the company is scouring the globe for deposits with a purse size of over $6 billion into nations such as Senegal and Mauritania with histories of civil strife. ArcelorMittal is investing $1.5 billion in Liberia.
BHP, Rio and Vale control about 80 per cent of seaborne trade in iron ore, and Luxembourg-based ArcelorMittal agreed in April to pay Vale 87 per cent more for ore as demand surges in China. ArcelorMittal plans to produce 80 per cent of its ore in the next decade, up from 45 per cent now, to maximise profits from US steel prices that are at a record-high $1,068 a ton. The company is now 45 per cent integrated in iron ore and the same is growing.
Among the largest steel producers, ArcelorMittal leads in raw materials exploration. Tokyo-based Nippon Steel Corp and JFE Holdings Inc, the world's second- and third-largest steel companies, rely on imported ore. The companies need to invest in exploration to reduce costs, Masaki Ishikawa, director of the iron and steel division at Japan's Ministry of Economy, Trade and Industry. However some steel industry veterans feel that a steel maker need not expose itself so much on the raw material side. This brings in attendant problem of meeting the civil unrest and internal political disturbances, as ArcelorMittal is facing in Jharkhand and Orissa.
Further, ArcelorMittal will spend about $850.5 million acquiring an iron ore mine and developing a port in Brazil to increase self sufficiency in the raw material. The company will pay about $810 million for London Mining Plc's Brazilian iron ore unit. It will also take an 80 per cent stake in a port in Rio de Janeiro state for $40.5 million and will develop the facility with Canada's Adriana Resources Inc. Mittal said in April that he aims to increase self-sufficiency in iron-ore to 75 per cent to 80 per cent by as early as 2014. ArcelorMittal may invest as much as $700 million to raise output to more than 10 million tonne. The development of port in Sepetiba Bay to handle that volume will cost about $250 million.Construction will start in final quarter of 2008 and will to take between 18 months and 2 years to complete. Brazilian investment ''ensures our iron ore base is further diversified in face of tighter supply for raw materials,'' CFO Aditya Mittal said.
India is not its only choice. The company is slated to reopen the operations of the Nimba iron-ore mine in Yekepa, Liberia in 2009, a mine that was abandoned in 1992 when civil war engulfed the nation. In addition, the company is scouring the globe for deposits with a purse size of over $6 billion into nations such as Senegal and Mauritania with histories of civil strife. ArcelorMittal is investing $1.5 billion in Liberia.
BHP, Rio and Vale control about 80 per cent of seaborne trade in iron ore, and Luxembourg-based ArcelorMittal agreed in April to pay Vale 87 per cent more for ore as demand surges in China. ArcelorMittal plans to produce 80 per cent of its ore in the next decade, up from 45 per cent now, to maximise profits from US steel prices that are at a record-high $1,068 a ton. The company is now 45 per cent integrated in iron ore and the same is growing.
Among the largest steel producers, ArcelorMittal leads in raw materials exploration. Tokyo-based Nippon Steel Corp and JFE Holdings Inc, the world's second- and third-largest steel companies, rely on imported ore. The companies need to invest in exploration to reduce costs, Masaki Ishikawa, director of the iron and steel division at Japan's Ministry of Economy, Trade and Industry. However some steel industry veterans feel that a steel maker need not expose itself so much on the raw material side. This brings in attendant problem of meeting the civil unrest and internal political disturbances, as ArcelorMittal is facing in Jharkhand and Orissa.
Further, ArcelorMittal will spend about $850.5 million acquiring an iron ore mine and developing a port in Brazil to increase self sufficiency in the raw material. The company will pay about $810 million for London Mining Plc's Brazilian iron ore unit. It will also take an 80 per cent stake in a port in Rio de Janeiro state for $40.5 million and will develop the facility with Canada's Adriana Resources Inc. Mittal said in April that he aims to increase self-sufficiency in iron-ore to 75 per cent to 80 per cent by as early as 2014. ArcelorMittal may invest as much as $700 million to raise output to more than 10 million tonne. The development of port in Sepetiba Bay to handle that volume will cost about $250 million.Construction will start in final quarter of 2008 and will to take between 18 months and 2 years to complete. Brazilian investment ''ensures our iron ore base is further diversified in face of tighter supply for raw materials,'' CFO Aditya Mittal said.
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