ArcelorMittal moves court as Canadian mine partners `renege' on buyout

14 March 2008

Mumbai: Steel giant ArcelorMittal SA, the former owner of Dofasco Inc, has approached the Ontario Supreme Court to force its partners in Canada's Wabush Mines Inc. to sell their controlling stake in the iron ore joint venture in Labrador and Quebec.

ArcelorMittal has sought the court's direction to its mine partners - US Steel Canada Inc (formerly Stelco) and Ohio-based Cleveland-Cliffs Inc - to follow through an earlier deal to sell their combined 72 per cent stake in the iron ore mine to ArcelorMittal Dofasco.

The two companies had last week dropped out of negotiations to sell their shares in Wabush Mines to Hamilton-based ArcelorMittal Dofasco Inc.

Under the deal arrived at in August last, ArcelorMittal Dofasco had offered to pay $67 million in cash and assume some of the liabilities to buy out the two partners in Wabush Mines.

"Everyone fully understood the terms of this agreement," ArcelorMittal Dofasco president Juergen Schachler said, adding, the two sellers had "binding legal obligations."

"Our decision to pursue legal action is done in an effort to expedite the closure of the sale, and provide some much needed certainty for the employees at Wabush as well as the community and government stakeholders," he said.