ArcelorMittal bids for Canadian miner

ArcelorMittal, the world’s largest steelmaker, offered C$433m (£267m) for Canadian miner Baffinland Iron Mines yesterday, in a further move to raise self-sufficiency.

Baffinland said its board had approved the offer, which values the company at C$1.10 a share, a premium of 16 per cent over the stock’s closing share price on Friday.

Baffinland has been looking for partners for its C$4bn Mary River project for about two years. The project has reserves of about 365m tons of ore grading an average of 65 per cent iron, and about 500m tons of ore resources. Baffinland urged its shareholders to tender their shares. ArcelorMittal has been seeking to expand its own production of and long-term contracts for iron ore and coal, particularly as major suppliers Vale, Rio Tinto and BHP Billiton move to quarterly from annual contracts and pump up prices.

The agreement marks a further push by steel majors into Canadian iron ore exploration after India’s Tata Steel increased its investment in New Millenium Capital Corp in June..

Baffinland’s largest shareholder, Resource Capital Funds, which owns about 23 per cent, and board members have agreed to tender all their common shares and warrants.