(Reuters) - ArcelorMittal, the world's biggest steelmaker, will sell a 15 percent stake in one of its Canadian iron ore operations, raising $1.1 billion to help pay off debt at a time of sluggish demand.
The group, which makes about 6-7 percent of the world's steel, will sell the stake in ArcelorMittal Mines Canada to a consortium including South Korean steelmaker POSCO and Taiwan-listed China Steel.
ArcelorMittal Mines Canada operates two large open-pit mines in the province of Quebec, where it also owns the Port-Cartier industrial complex that includes a pellet plant, storage areas and port facilities for shipping.
ArcelorMittal also owns the huge Mary River iron ore project in Canada's arctic, in which it sold a 20 percent stake to joint venture partner Nunavut last month.
As part of the deal announced on Wednesday POSCO, China Steel and ArcelorMittal Mines Canada will enter into long-term iron ore supply agreements.
ArcelorMittal needs the funds to help compensate a slump in Europe, where demand is estimated to have fallen about 8 percent in 2012 and 29 percent since the start of the financial crisis in 2007.
ArcelorMittal is one of Canada's top exporters of iron ore to steel markets around the world and its operations account for about 40 percent of Canada's iron ore output.
The transaction is subject to approval from the Taiwanese government, and is expected to close in two installments in the first and second quarters of 2013.
Goldman Sachs and RBC Capital Markets are advising ArcelorMittal on the deal, while Morgan Stanley is advising the POSCO consortium.
edited from Reuters
