On Oct. 9, United States Steel Corporation’s (X) wholly owned subsidiary U.S. Steel Canada Inc., ArcelorMittal Dofasco and Cliffs Natural Resources Inc. (CLF) have agreed to sell their respective interest in the Wabush Mines joint venture to a Montreal-based steel mining company, Consolidated Thompson Iron Mines Ltd., for $120 million.
Wabush Mines owns and operates iron ore mining and pellet facilities in Newfoundland in the U.S. and Labrador and Quebec in Canada. Wabush’s total rated annual production capacity is 6.4 million tons of iron ore pellets.
U.S. Steel holds 44.6%, ArcelorMittal Dofasco holds 28.6% and Cliffs Natural Resources holds 26.8% in the joint venture. Completion of the transaction is subject to a right of first refusal held by the third owner – Cliffs. ArcelorMittal (MT), the world’s largest steelmaker, will receive $34.28 million for its interest. Consolidated Thompson plans to finance the transaction with existing cash and credit facilities. Other terms of the transaction were not released.
Pittsburgh, PA-based United States Steel Corporation is a leading steel manufacturer in the U.S. and the fifth largest worldwide. It produces and sells steel mill products including flat-rolled and tubular products in North America and Europe. U.S. Steel has a global annual raw steel production capacity of 31.7 million net tons (24.3 million tons in North America and 7.4 million tons in Europe).
U.S. Steel is in the midst of achieving $200 million in cost synergies from the acquisitions of Canadian flat roll producer Stelco (renamed as U.S. Steel Canada/USSC) and domestic tubular manufacturer Lone Star Technologies (currently a part of U.S. Steel Tubular Products), mostly from overhead reduction and improved raw materials sourcing.
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