GO
Loading...

Enter multiple symbols separated by commas

Arcelor Mittal, Senegal Sign Mining Deal

Arcelor and Mittal Steel , which have agreed on a deal to form the world's largest steelmaker, said Friday they have signed agreements worth $2.2 billion with the government of Senegal to mine iron ore in the West African nation.

They said the project, due to start in 2011, would include developing the mine, building a new port near Dakar and laying 467 miles of railway to link the mine and the port.

When the mine becomes fully operational, it should produce between 15 million and 25 million metric tons a year. Total estimated iron ore reserves are around 750 million metric tons at four locations in the Faleme region of southeast Senegal.

The agreements will only enter force when the Senegalese government fulfills certain conditions, the companies said, without specifying what those were.

"Once completed, the Faleme project will prove to be an important and competitive source of iron ore supplies for our European plants," Arcelor Mittal Chief Executive Lakshmi Mittal said.

"This project is an important step in our strategy of creating West Africa as a mining hub for iron ore supplies to our steel plants around the world."

Mittal has proposed paying about $33.4 billion for Arcelor in a deal that the companies hope to complete in July after securing regulatory approval. The combined company will have a 10% share of the world steel market and will be known as Arcelor Mittal.

Arcelor Mittal also plans to develop an iron ore mine in western Liberia, largely ruined after its 1989-2003 civil war. The companies will spend some $900 million building the mine, railway and port infrastructure.

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

  • Ferrari 488 Spider

    Ferrari's new 488 Spider will have a V-8 turbo engine and a retractable hard-top roof that lowers in just 14 seconds.

  • Members of the New Horizons science team react to seeing the spacecraft's last and sharpest image of Pluto before closest approach later in the day at the Johns Hopkins University Applied Physics Laboratory (APL) in Laurel, Maryland July 14, 2015.More than nine years after its launch, a U.S. spacecraft sailed past Pluto on Tuesday, capping a 3 billion mile (4.88 billion km) journey to the solar system's farthest reaches, NASA said.

    The New Horizons Pluto flyby mission set records for NASA's social media and web metrics——but why do we care so much?

  • Thomas Lee

    This year's flat market is reminiscent of 1904, says Thomas Lee of Fundstrat Global Advisors in an interview with Amanda Drury.

U.S. Video

  • Yelp CEO remains optimistic

    Yelp CEO Jeremy Stoppelman says the company will ramp up its marketing efforts for the third and fourth quarters. CNBC's Josh Lipton provides insight from the earnings call.

  • Twitter turns negative

    Twitter's CFO Anthony Noto is speaking on Twitter's earnings conference call, saying growing users and advertiser demand will take time. Bob Peck, SunTrust Robinson Humphrey, has the details.

  • Akamai crushed, traders say buy

    Akamai reported weak sales guidance for the third quarter, reports CNBC's Dominic Chu. "Fast Money" traders Steve Grasso and Pete Najarian see an opportunity.