01 September 2007

DOFASCO buys Wabush Mines

In the latest twist of the tale, DOFASCO will buy out Wabush Mines, thus shutting Consolidated Thompson (CT) out of the equation.

Quebec Cartier considered buying the mine once.

Consolidated Thompson considered it in late 2006, then rejected it.

Then Stelco sold its shares or at least started to sell them to CT, until this DOFASCO decision. The other bit owned by Cleveland-Cliffs was also supposed to go to CT.

Now DOFASCO, owned by a Belgian concern with international interests, will exercise its options and buy out its other partners in the western Labrador mining venture. Arcelor/Mittal is described on the company website this way:
Its industrial presence in Europe, Asia, Africa and America gives the Group exposure to all the key steel markets, from emerging to mature. ArcelorMittal will be looking to develop positions in the high-growth Chinese and Indian markets.

ArcelorMittal key pro forma financials for 2006 show combined revenues of US$ 88.6 billion. Its production was equivalent to around 10% of world steel output.
This announcement is a surprise, perhaps especially for provincial transportation minister John Hickey. In June, Hickey delivered a ministerial statement in the House of Assembly in which he praised the CT acquisition of a majority stake in Wabush Mines as evidence of the work supposedly done by the provincial government to facilitate the deal.

Evidently, the done deal wasn't quite so done after all.