SINGAPORE A consortium led by Pohang, South Korea-based steelmaker Posco Ltd. and Kaohsiung, Taiwan-based China Steel Corp. has agreed to buy a 15-percent stake in a Canadian iron ore mine operated by a unit of ArcelorMittal SA for $1.1 billion, China Steel said Wednesday.
ArcelorMittal Mining Canada and its affiliates will retain an 85-percent interest in the Labrador Trough iron ore mining assets.
As part of the transaction, Posco and China Steel will enter into long-term iron ore offtake agreements proportionate to their joint-venture interests.
The consortium, which includes Posco, China Steel and other financial investors, will pay for the transaction in cash.
The deal is intended to provide Posco and China Steel with greater access to supplies of iron ore used for steel production. The investment could boost China Steels iron ore feedstock self-sufficiency ratio by 4.2 to 11.6 percent, the company said.
The deal is subject to various closing conditions, including regulatory clearance by the Taiwanese government, and is expected to close in two installments in the first and second quarters of 2013, China Steel said.
A version of this article was first published by AMM sister publication Steel First.