ArcelorMittal, BHP Billiton mull combining African iron ore interest

The world's largest miner, BHP Billiton and the world's largest steel producer ArcelorMittal have entered into preliminary discussions to combine their respective iron ore interests in Liberia and Guinea.

In a statement released today, both companies said that they were looking at the possibility of merging their respective iron ore mining and infrastructure interests in Liberia and Guinea within a joint venture.

''The iron ore interests of the two companies in Liberia and in Guinea are proximate and could be significantly more competitive if brought together in a combined operation, said ArcelorMittal.

''The combination of these interests together with each firm's execution capabilities and financial strength would provide an excellent platform on which to build an iron ore business in West Africa of world-class scale and scope and bring meaningful benefits to the region, said BHP Billiton.

Although both companies did not reveal the size of their iron ore deposits, the Luxembourg-based ArcelorMittal is looking to be self sufficient in iron ore-a key ingredient used in the making of steel.

Last month, ArcelorMittal's head of strategy, Bill Scotting had said that acquisitions of mining companies "will be part of the mix next year," and expanding mines and developing projects will be undertaken by the company in 2010 as a part of its drive to be more self-sufficient.