ArcelorMittal SA, the world's biggest steel producer, announced today it has acquired London Mining Brasil, a Brazilian iron ore miner, and said it will develop port facilities in Rio de Janeiro state together with Canadian iron ore producer Adriana Resources Inc.

The world's largest steelmaker said it would acquire all of London Mining Brasil's issued share capital from London Mining Plc for $764 million (€520.5 million) and assume loans of $46 million (€31.3 million) raising the cost of the acquisition to $810 million (€551.9 million).

The transaction also includes the assignment of inter-group loans from London Mining of approximately $46 million. The total consideration payable to London Mining will amount to approximately $810 million.

This acquisition by ArcelorMittal will shore up its iron ore supply to 75 per cent from its present level of 45 per cent by 2012.

London Mining Brasil is located 65 kilometers (40 miles) from Belo Horizonte, Brazil. It has an estimated 1,059 million tonnes of measured, indicated and inferred iron ore resources, ArcelorMittal said, adding it was considering investing another $700 million to increase production.

ArcelorMittal also announced it reached an agreement with Canada's Adriana Resources for the development of an iron ore port facility in the State of Rio de Janeiro in Brazil. "ArcelorMittal intends to use its share of the port's capacity to export iron ore from the London Mining Brasil mine to its steel facilities in the Atlantic basin," it said.

It said it would pay $40.5 million for 80 per cent of the port with Adriana holding the remaining 20 per cent. ArcelorMittal will also acquire up to 19.9 per cent of Adriana's common shares and get a seat on its board of directors.

The development of the port in Sepetiba Bay to handle that volume will cost about $250 million. Construction will start in the final quarter of 2008 and is expected to take between 18 months and 2 years to complete.

In a statement, ArcelorMittal called the transactions - which require regulatory approvals - an "important investment in the dynamic Brazilian market (and) ensures that our iron ore base is further diversified in the face of tighter supply for raw materials."

ArcelorMittal is the world's largest steel company with more than 320,000 employees in over 60 countries. It aims to raise its iron ore self-sufficiency to 75 per cent by 2012 from 45 per cent currently and has recently raised its coal self-sufficiency to 20 per cent from 15 per cent after buying mines throughout the world this year. (See: ArcelorMittal takes 49 per cent in Brazilian miner   / ArcelorMittal to spend $760 million on Mexican and American projects / ArcelorMittal acquires US coal producer Concept Group / ArcelorMittal buys Bayou Steel of the US; hikes stake in Turkey's Erdemir)

In May it reported a 5 per cent rise in first quarter profit to $2.37 billion as strong worldwide demand allowed it to hike prices despite higher costs. In 2007, it had revenues of $105.2 billion (€71.7 billion) and crude steel production of 116 million tonnes, around 10 per cent of world output.