BRUSSELS: Arcelor Mittal, the world’s largest steelmaker, said on Friday it would invest $2.2 billion (Rs9,742 crore) to develop iron ore mining in Senegal, pursuing its strategy of increasing the share of metal supply it directly owns.
“Once completed, the Faleme project will prove to be an important and competitive source of iron ore supplies for our European plants,” Arcelor Mittal majority owner and Chief Executive Lakshmi Mittal said in a statement.
The steel giant said it aimed to achieve annual production capacity of between 15 million and 25 million tonnes and that total estimated reserves were approximately 750 million tonnes.
Production is expected to begin in 2011.
“This goes in the right direction, they are continuing the vertical integration of their iron core needs,” said an analyst who declined to be named.
The steelmaker’s shares were up 0.15% at 39.22 euros at 1010 GMT, slightly underperforming the Dow Jones Stoxx European basic resources index, which was up 0.37%.
The project comprises building a new port near Dakar and the development of approximately 750 kilometres of rail infrastructure to link the mine with the port.
Arcelor Mittal said on Wednesday its 2006 core earnings reached $15.3 billion, in line with its guidance, and indicated it was eyeing more acquisitions in India and China as well as investments in new plants around the world.