ArcelorMittal to boost iron output

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ArcelorMittal, the world's largest steelmaker, will divert some of its planned spending from steelmaking to iron-ore mining in Africa to raise supplies of the raw material.

“I am moving some of my steel capital to mining,” said Malay Mukherjee, a member of ArcelorMittal's management board. “Between 12 and 15 million tonne would come from Liberia by 2012, and Senegal would contribute another 15 million tonne by 2014,” he added.

ArcelorMittal plans to produce about 80% of the iron ore it uses within the next decade to protect itself against price increases from the three companies that dominate the market, including BHP Billiton Ltd, the world's biggest miner.

“The Luxembourg-based steelmaker has 60 million tonne of captive ore, or material that ArcelorMittal produces for its steel-making plants, and needs 150 million tonne a year,” Mukherjee said in an interview on Wednesday.

ArcelorMittal, which makes about 10% of the world's steel, is trying to counter the market power of BHP, Rio Tinto Group and Cia. Vale do Rio Doce, which control more than 70% of the world's seaborne iron-ore trade. BHP has made a hostile bid for Rio.

Iron ore accounts for almost a quarter of the cost of making steel products such as hot-rolled coil, according to Credit Suisse Group.