Luxembourg, 22 Nov – Steel making company ArcelorMittal acquired a 35 percent stake in joint venture Rio Minjova Mining and Exploration Company with Mozambican company Black Gold Mining (Moc), the company said in a statement Wednesday.
Under the terms of the deal that was signed, ArcellorMittal will pay US$2.5 million for its stake in the company and Black Gold Mining will transfer its coal concessions, which cover 49,360 hectares, in the area of the Minjova river, in Tete province.
ArcelorMittal also has the option to become a majority shareholder in the joint venture as long as it pays an additional US$2.5 million and there is confirmation that the “proven and probable” reserves are considered satisfactory.
This is very likely, given that the area of the Minjova river is close to the area in which Brazil’s Companhia do Vale do Rio Doce (CVRD) plans to mine for coal.
Tuesday, ArcelorMittal signed a cooperation agreement with the Mozambican government to develop both the steel production and mining sectors.
ArcelorMittal’s first venture in Mozambique began in October 2006 when Mittal Steel South Africa agreed to buy the assets of two bankrupt companies, steel maker CSM and steel wire maker Trefil, as well as pledging to invest US$10 million in rebuilding the two companies.
The company, which is the largest in the sector, has 320,000 employees in over 60 countries, in 2006 posted turnover of US$88.6 billion with production of 118 million tons of steel and is listed on the New York, Amsterdam, Paris, Brussels, Luxembourg, Barcelona, Bilbao, Madrid and Valencia stock exchanges. (macauhub)