July 15th (Reuters) – Australia’s two leading iron ore producers, BHP Billiton Ltd (BHP.AX: Quote, Profile, Research)(BLT.L: Quote, Profile, Research) and Rio Tinto Ltd (RIO.AX: Quote, Profile, Research)(RIO.L: Quote, Profile, Research), have settled on a 71 percent rise in iron ore contract prices with European steel mills, an Australian newspaper reported on Tuesday.

The reported price rises are less than the near doubling of prices agreed with Asian steel mills but are in line with prices agreed with Brazil’s Vale (VALE5.SA: Quote, Profile, Research)(RIO.N: Quote, Profile, Research) in March.

 

BHP and Rio Tinto both declined to confirm the deals on Tuesday.

 

The Australian newspaper reported that BHP agreed to receive the same for its iron ore from steel giant ArcelorMittal (ISPA.AS: Quote, Profile, Research) that Vale had secured.

 

The two Australian producers earlier this month struck deals with Chinese and Japanese steel mills for a 96.5 percent increase in lump iron ore and a 79.88 percent increase for fine iron ore shipments in 2008/09.

 

BHP sends less than 2 percent of its iron ore to Europe. The Australian newspaper said the company is keen to show that it is a price taker in Europe where it is seeking European Commission approval for a $160 billion hostile takeover bid for Rio Tinto.

 

Rio Tinto said it had settled European iron ore contracts, but as the market made up only about 3 percent of its sales from Western Australia’s Pilbara, it would not reveal the extent of its price rises.

 

Prices varied with customers’ freight arrangements, a spokeswoman said.

 

Australian iron ore producers do not have the same freight advantage to Europe as they command over Vale with sales to Asia.

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July 2nd (The Gazette) – ArcelorMittal, the world’s largest steelmaker, said today it would be interested in buying Iron Ore Co. of Canada from Rio Tinto Group as it builds up its own “captive” sources of iron ore to a target level of 70 per cent of its needs. ArcelorMittal, which owns neighbouring Quebec Cartier Mining, said acquiring IOC, the biggest Quebec-Labrador producer, would be “a natural fit… we share a lot of infrastructure.” But Rio said IOC is “a good operation and is not on our short list of possible dispositions.”

Rio, parent of Canada’s Alcan and one of the world’s top three iron ore producers, owns 59 per cent of IOC. In March it said it would invest $500 million to expand IOC’s annual capacity from 16 million tonnes to 22 million tonnes of concentrates.

June 30th (MSN Money/Reuters) – Lakshmi Mittal is looking at entering the takeover battle for the Rio Tinto mining group, the Financial Times reported on Monday, quoting people familiar with the situation.

Mittal, main shareholder in steelmaker ArcelorMittal as well as being chairman and chief executive, was keen to secure larger supplies of iron ore, said the newspaper.

Rio, one of the world’s major producers, is the subject of a contested bid by Australian mining group BHP Billiton, worth about $160 billion at present share prices. The deal is being scrutinized by anti-trust regulators.

The Financial Times said Mittal’s thinking emerged as his adviser Goldman Sachs announced he had joined the board of the Wall Street bank.

“Mr Mittal has considered some involvement in the takeover, such as the idea of taking a stake in Rio through buying from existing shareholders,” it quoted an unnamed banker as saying.

“On the other hand, he could wait until later, when quite possibly some of the iron ore assets (of Rio) go on sale as a result of demands by anti-trust regulators,” said the banker.

The Financial Times said bankers believed Rio’s iron ore assets were currently worth about $50 billion. But this figure could fall sharply in the next few months, particularly if the boom in steelmaking starts to peter out.

No immediate comment was available from ArcelorMittal on the report.

June 26th (Steel Guru) – PTI reported that ArcelorMittal has formally applied for iron ore mines, ahead of submitting the detailed project report for its proposed Greenfield project in Orissa’s Keonjhar district.

Though ArcelorMittal had not mentioned the name of any specific iron ore reserve, it had applied for PL for mines including Mankadanachha, Malangtoli and Thakurani in Keonjhar district and Badamgadapahad and Balipahada spread over both Keonjhar and Sundargarh districts. ArcelorMittal, which requires 7,750 acres for setting up its plant, CPP and township, was also working on the forest diversion proposal.

Mr Sanak Mishra ArcelorMittal chief for Greenfield projects said that “We have 10% of the total land which required forest diversion clearance.”

Official source said that ArcelorMittal, which is expected to submit its detailed project report to the state government by June end or early July 2008, had applied for a prospecting license as well as mining lease for its proposed 12 million tonnes per annum steel mill. It added that the state government, which was busy in hearing applications for PL over Khandadhar iron ore reserve in Sundargarh district, would begin hearing on other mines after July 2008.

June 15th (Economic Times) – Close on the heels of bagging its first iron ore mining licence, the world’s largest steel company, ArcelorMittal, is set to deepen its engagement with India. The steelmaker will convert its operating company into an operating-cum-holding company.

The decision follows a formal nod to its proposal from the finance ministry last week. The company’s proposal was among a total of 13 proposals approved on Thursday, June 12. Earlier in the week, the company received allotment for iron ore mining licence on 500 acres at Karampada in Jharkhand’s West Singhbhum district.

“The conversion of our operating licence into a holding company is part of a standard procedural requirement to participate in joint ventures for coal mining. However, it signifies a step forward for ArcelorMittal terms of its involvement in India,” a company source said when contacted by ET. This would result in a FDI inflow of Rs 41 lakh.

Last November, the Centre had allocated coal mining rights to ArcelorMittal in Jharkhand, along with GVK Power Ltd, on sharing basis.

The company has also been given coal block in Orissa. While the steel giant has been given a coal block at Seregarha in Jharkhand, it has been allotted Rampia and Dip side of Rampia block in Orissa along with partners like Sterlite Industries. Both the blocks will generate coal to produce 750 mw of power each.

As part of that allotment, the government had stipulated that ArcelorMittal would have to convert its operating company into a operating cum holding company in order to make further downstream investment.

June 15th (Steel Guru) – It is reported that Ukrainian iron ore miner Ferrexpo poised to enter the FTSE 100 index will start formal talks with several big mining groups and steelmakers about a USD 5 billion partnership to develop new mines.

Mr Mike Oppenheimer CEO of Ferrexpo said its company aimed to raise its iron pellet production over the next five years, from 9 million tonnes to 35 million tonnes a year. He said that “These plans are well advanced we are at the stage of formal engagement in discussions with interested parties.”

He said that the building of the Yeristovskoye mine would cost about USD 2 billion with the Belanovskoye mine costing USD 2.5 billion to USD 3 billion. He added that “It’s a big resource.”

Mr Oppenheimer said he was aiming to strike a deal with a partner before the end of the year.

Ferrexpo is due to start formal talks this week with companies including Rio Tinto and Anglo American, which are large miners of iron ore, and steelmakers including ArcelorMittal and Voestalpine, which are anxious to secure iron ore supplies at a time of strong demand. Ferrexpo has hired JPMorgan Cazenove to manage the process.

Ferrexpo already has basic designs for the mines and processing plants, but is keen to do a deal with a company that can help with the engineering and management, as well as the financing, of such a big project.

The Switzerland based company controlled by Mr Kostyantin Zhevago, the 33 year old Ukrainian billionaire businessman and politician owns the Poltava iron ore mine in central Ukraine and a plant that turns the ore into concentrated pellets. These pellets are sold to steel companies, especially those operating in central and Eastern Europe such as Voestalpine, ArcelorMittal and US Steel.

June 9th (Bloomberg) – ArcelorMittal, the world’s largest steelmaker, secured a permit to mine iron ore needed for a planned project in the eastern Jharkhand state almost three years after the company announced the $10 billion venture.

The permit allows Luxembourg-based ArcelorMittal to mine 500 acres of land in Jharkhand, according to a statement today on the Ministry of Mines Web site. The eastern state holds 17 percent of India’s iron ore reserves.

Land disputes and bureaucratic delays faced by steelmakers in India underscore the growing gap with China, the fastest- growing major economy, and India, the second-fastest. India may have produced 55.5 million metric tons of steel in the year ended March, about a tenth of China’s output, according to government estimates.

The ArcelorMittal plant in Jharkhand, announced in October 2005, would have capacity of 12 million tons a year. In 2006 the company announced a similar sized project in neighboring Orissa.

The Indian states Jharkhand, Orissa and Chhattisgarh account for 70 percent of the nation’s coal reserves and 55 percent of its iron ore, according to McKinsey & Co.