“Iron ore together with coal represents 80 percent of steel production costs. As we are the biggest global producer, the more costs we reduce, the more competitive we become in steel,” Costa, 53, said.
ArcelorMittal to Boost Brazilian Iron-Ore Output 65% in 2013
By Juan Pablo Spinetto on March 16, 2012
ArcelorMittal (MT), the world’s largest steelmaker, plans to boost iron-ore output in Brazil 65 percent to 7.1 million metric tons next year as it seeks to raise its self-sufficiency of the ingredient to make steel.
ArcelorMittal is spending $125 million to expand iron-ore mines in Brazil, where it expects to produce 4.3 million metric tons this year, Sebastiao Costa Filho, the head of the company’s mining business in Brazil, said in a telephone interview from Belo Horizonte today. The company produced about 5.3 million tons in 2011, he said.
Steel companies have been expanding iron-ore reserves as prices for the key raw material have risen almost 150 percent in the past three years. Arcelor, based in Luxembourg, expects to produce 100 million metric tons by 2015, up from 54 million tons last year, as it taps mining assets in countries including Canada, Brazil and Liberia, according to a Feb. 27 presentation.
“Iron ore together with coal represents 80 percent of steel production costs. As we are the biggest global producer, the more costs we reduce, the more competitive we become in steel,” Costa, 53, said.
Arcelor is expanding its Andrade and Serra Azul mines, in Brazil’s state of Minas Gerais (USIM5), from which it supplies its own steel plants in Brazil and also sells to local customers including Usinas Siderurgicas de Minas Gerais SA, Costa said. The company will export about 800,000 metric tons in the first half of the year, he said.
Port Access Sought Arcelor expects to develop its Serra Azul mine further if it gains access to a port to be able to export more, Costa said. The company is in “advanced talks” with Usiminas, as Brazil’s second-largest steelmaker is known, and port operator Multiterminais to jointly bid for a port concession in the Rio de Janeiro state, he said.
“Accessing a terminal will mean we have the chance to send our iron ore overseas, being able to make new investments,” Costa said. “Port access is the most problematic logistic in Brazil these days.”
Arcelor gained 0.6 percent to 15.83 euros at the close in Amsterdam.
To contact the reporter on this story: Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net
To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net |
