ArcelorMittal CEO Lakshmi Mittal said the steelmaker plans to triple production of iron ore in Brazil by 2014 to reduce dependence on mining companies, BHP Billiton and Vale SA prices stimulate Ltd. ArcelorMittal production should reach 15 million metric tonnes from its mines in Brazil, up 5 million tons now, Mittal said today in Sao Paulo. ArcelorMittal is the largest steelmaker in the world.
The company based in Luxembourg will take 5 billion to boost steel and iron ore output in Brazil over the coming four years with increasing demand from automakers and builders, Mittal. The South American country will spend more than $ 20 billion on infrastructure to host the 2014 World Cup and the Olympics in 2016, the company said in a March 25 presentation.
“Brazil has opened the road to growth after eight years of political and economic stability,” Mittal said today.
ArcelorMittal has asked the increasing independence of producers of iron ore by boosting production of its own mines in the world in recent years to reduce costs. ING Groep NV cut its rating of ArcelorMittal to “hold” from “buy” no 11 March, said soaring raw material costs will hurt margins in the steel.
Vale, the world’s largest producer of iron ore, have obtained an increase of 90 per cent of the price of Japanese factories in the transition to quarterly contracts. BHP, the world leader of the largest mining, has received an increase of 99.7 in prices of iron ore during the quarter for most of its steelmaking customers in Asia, Macquarie Group Ltd. said last week .
Conversations with Vale
Brazil Cia. Siderurgica Nacional SA doubled the price it charges for iron ore this month, Chief Executive Officer Benjamin Steinbruch said yesterday.
Mittal also said ArcelorMittal is still in talks with Rio de Janeiro-based Vale to build a steel plant in the southeastern state of Espirito Santo Brazil.
Vale announced last year it is looking for partners to develop CIA. Siderurgica Ubu project that will produce 5 million tons of steel slabs per year. Vale canceled a January 2008 agreement with China’s Baosteel Group to build a factory on the site on the Atlantic coast.
ArcelorMittal American Depositary receipts fell 82 cents, or 1.8 percent, to $ 45.93 per share at 1:07 pm in New York. The shares have risen 70 percent over the last 12 months.
Port of iron ore
ArcelorMittal will invest in its Monlevade mine, about 11 kilometers (6.8 miles) of its steel plant of the same name in southern Minas Gerais in Brazil, according to the presentation last month. ArcelorMittal may also invest in a marine terminal new iron ore in Rio de Janeiro, said Mittal.
The company prefers to develop “organically” in Brazil and is studying acquisitions in the country, Mittal said today.
ArcelorMittal provides more than one third of long steel products used in construction in Brazil. Brazilian operations of the company generated 35 percent of earnings before interest, taxes, depreciation and amortization.
source:bloomberg
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