ArcelorMittal Progresses Bid for Baffinland

By Joel ScanlonJan 27 2011

ArcelorMittal and Nunavut Iron Ore have announced that they have been given control of 59% of Baffinland Iron Mines and so have extended their offer which expired on Monday to February 4. The battle for company ownership which took up so much media attention may now finally be resolved.

The reason why the world’s largest steel maker is so interested in this relatively small deal valued at $593 million lies in the Mary River mining project on Baffin Island. The deposit of high concentration iron ore here will take up to $7 billion for the new joint venture partners.

However ArcelorMittal is keen to break its dependency for iron on the mining companies trio of Rio Tinto, Vale SA and BHP Billiton. All of whom moved to a quarterly pricing for iron ore from annual contracts and caused major financial havoc for ArcelorMittal.

The environmental and social impact assessment plans have been submitted for the mine. The review should be complete by 2013. The open pit mine planed at Baffin Island will allow ArcelorMittal to expand its iron ore mining operations. A major chunk of which came from its acquisition of the Canadian steelmaker Dofasco. This will eventually help weaken the hold of the mining giants on the company.