ArcelorMittal selling $1.1-billion stake in Canadian iron ore business to Asians

ArcelorMittal (NYSE:MT) has decided to sell off 15% of its Canadian iron ore business, in an attempt to weather the slump in its key commodity. As the biggest steel producer in the world, the company is worth $10 billion.

The company said Wednesday it would let go of part of its ownership in ArcelorMittal Mines Canada to a consortium that includes South Korean steelmaker POSCO and Taiwan-listed China Steel.

ArcelorMittal, which makes about 6-7% of the world’s steel, operates two large open-pit mines in the Canadian province of Quebec. There it also owns the Port-Cartier industrial complex that includes a pellet plant, storage areas and port facilities for shipping.

The global steel industry is pessimistic about both existing market conditions and future prospects, with the worries being most intense in Europe as well as with the declining Chinese consumption, say analysts.

The most significant evidence of a sinking steel market was the unexpected May announcement from ThyssenKrupp of Germany who said it was looking for buyers for two big and expensive steel mills in the U.S. and Brazil, costing about $16 billion between them, which it started planning before the crisis.

Later in July, ArcelorMittal’s chairman and CEO Lakshmi Mittal, born in Indian and Britain’s richest man, announced the company was closing down or shelving some of its European plants.

At the same time as news about the selling of a stake in Canada’s iron ore unit came out for the first time, the steel maker giant’s stock had its “buy” rating restated by equities researchers.

ArcelorMittal’s steel has been used in famous landmarks around the world, including the new One World Trade Center in New York City, the Grand National Theatre of China in Beijing, the new Reichstag in Berlin and the world’s first-ever zero-emission polar research station, Princess Elisabeth Antarctica.

International sports venues have also been built with ArcelorMittal steel, from Johannesburg’s Soccer City to the Cape Town Stadium, both used for the 2010 World Cup in South Africa, to the Wembley Stadium in London.