As part of its strategy to offload assets and reduce debt, ArcelorMittal decided to sell 15 percent stake in Canada’s Labrador Trough iron ore mining and infrastructure asset.
The stake would be bought by a consortium that includes South Korean steelmaker POSCO and Taiwan-listed China Steel Corp in a deal valued at $1.1 billion, reports suggest.
Reports also suggest that POSCO, China Steel and ArcelorMittal Mines Canada would own Labrador Trough through a joint venture and would enter into long-term iron ore supply agreements.
However, the deal is subject to approval from the Taiwanese government, and is expected to close in two installments in the first and second quarters of 2013.
ArcelorMittal plans to offload assets and reduce debt amidst sluggish steel demand and weak global marcoeconomic scenario.
The deal will give POSCO, the world’s fourth-biggest steelmaker, access to iron ore and coal used to make steel, as it currently imports nearly all of its key raw materials. POSCO already owns a 12.5 percent stake in Australia’s $10 billion Roy Hill project.
One of the leading exporters of iron ore in Canada, ArcelorMittal’s operations account for about 40 percent of Canada’s iron ore output.