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LONDON—Rio Tinto Group, the world’s second-largest iron
ore producer, rose the most in almost two weeks in
London trading Monday after the Financial Times said
ArcelorMittal may buy a stake to secure supplies of the
steelmaking raw material.
ArcelorMittal could afford to buy a similar size to the
9 percent, $14-billion shareholding acquired in February
by Aluminum Corp. of China and Alcoa Inc., the FT
reported, citing unidentified people familiar with the
matter. Rio, subject of a $171-billion hostile bid from
BHP Billiton Ltd., rose as much as 3.1 percent, the
largest intraday gain since June 17.
Chief
executive Lakshmi Mittal has also considered buying
iron-ore assets should antitrust regulators demand their
sale as a condition of a tie-up between London-based Rio
and BHP, the newspaper said, citing a banker.
“It
doesn’t make any sense as ArcelorMittal will be just as
influential by being a big customer as it would by
owning a stake in the company,” Charlie Dove-Edwin, an
analyst at MF Global Securities based in London, said in
a telephone interview. “I don’t think a deal like this
could go through.”
Haroon
Hassan, a spokesman for ArcelorMittal in London,
declined to comment, as did Ian Head, a spokesman for
Rio in Melbourne.
Separately, ArcelorMittal said Sunday it had increased
its stake in Australian miner Macarthur Coal Ltd. to
just under 20 percent, days after talks on a possible
takeover ended without a deal.
ArcelorMittal increased its stake from 14.9 percent to
19.9 percent by paying A$212 million ($204 million) for
an extra 5 percent from Talbot Group Holdings, owned by
Macarthur founder Ken Talbot.
It
said the purchase was in line with recent moves to
secure its own supplies of key raw materials as global
prices soar. Macarthur supplies more than a third of the
world’s pulverized coal, which is used to heat steel
furnaces.
ArcelorMittal last month approached Macarthur about a
potential takeover, but talks between the two companies
ended last week without a deal. Macarthur said it
welcomed ArcelorMittal as a substantial shareholder and
wanted a long relationship with it as a customer.
ArcelorMittal, which produces some 10 percent of the
world’s steel, said it has now spent A$843 million ($810
million) building up its stake in Macarthur. This values
the miner at some $4 billion.
Also
on Sunday Goldman Sachs Group Inc. said that the
billionaire steel magnate Mittal has been elected as an
independent director at the world’s largest investment
bank.
Mittal
joined Goldman Sachs’ 13-member board Saturday and will
serve on its Audit, Compensation and Corporate
Governance and Nominating committees.
“Lakshmi Mittal has reshaped a global industry and, in
the process, has engineered new modes of production,
identified unrealized value and sparked remarkable
growth,” Goldman Sachs chairman and CEO Lloyd Blankfein
said in a written statement. “He has a keen
understanding of the global economy, having operated in
virtually every corner of the world.”
Mittal
founded Mittal Steel Co. in 1976 and served as CEO of
Mittal Steel until 2006, when the company acquired
Arcelor SA to form ArcelorMittal.
Mittal
also serves as a director of Airbus maker European
Aeronautic Defence & Space NV and ICICI Bank Ltd. of
India. |
