ArcelorMittal buys Brazilian iron ore assets to secure supply

ArcelorMittal, the world's largest steelmaker, has acquired the Brazilian iron ore assets of Anglo-African miner London Mining for $810 million.  ┬á London Mining (Lonmin) purchased its assets in Brazil in May 2007, and has since been investing in the subsidiary to more than double production to 3.2 million metric tons per annum. ┬á┬á Arcelor, which produces around a tenth of the world's steel, plans to increase production to 10.0 million metric tons per annum in the medium term, by investing up to $700 million in the business.┬á┬á ArcelorMittal is trying to expand its steel-production capacity to cater to demand in emerging markets, and Brazil has been one of its main focus points. Arcelor also said Wednesday that it had reached an agreement with Canadian miner Adriana Resources to develop an iron-ore port facility in Rio De Janeiro.┬á┬á "This is another important investment in the dynamic Brazilian market," said chief financial officer Aditya Mittal. "The acquisition of London Mining Brasil ensures that our iron ore base is further diversified in the face of tighter supply for raw materials."┬á┬á Arcelor currently produces 45 percent of its iron ore supply itself, but intends to raise this to 75 percent by 2012.┬á┬á Lonmin said it had initiated a review of its Brazilian business after a number of expressions of interest. It said it aimed to return about $427 million of the proceeds from the sale to its shareholders, while the rest will be used to pay back debt and for the development of new and existing projects. ┬á┬á "We trust that investors will start to fully recognize our other iron ore and coal assets, as well as the strength of our management and technical teams," said Lonmin's managing director Christopher Brown. ┬á┬á ArcelorMittal was founded in 2006 by the merger of Arcelor and Mittal Steel. The company is headquartered in Luxembourg, the former seat of Arcelor. Chairman and CEO Lakshmi Mittal is said to be the worldÔÇÖs fourth richest man.  ┬á┬á┬á┬á*┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á┬á┬á *