ArcelorMittal strikes 10-year iron ore deal with Brazil`s Vale

Mumbai: ArcelorMittal SA, the world's largest steel maker, has signed a deal with Brazilian miner Companhia Vale do Rio Doce (Vale) under which its plants in Europe, Africa and the Americas would get 489 million tonnes of iron ore and pellets over a 10-year period.

ArcelorMittal did not disclose the value of the the ''world's largest-ever deal between a steel company and an iron ore supplier.'' 

ArcelorMittal, which accounts for around 10 per cent of global steel output, is trying to supply three quarters of its own iron ore, up from 45 per cent at present, as it ramps up steel production, said board member Davinder Chugh.

He blamed the recent steel price spikes to expensive iron ore contracts and said ArcelorMittal is seeking to develop its own mining and energy projects to shield it from higher commodity prices.

Vale, the world's largest iron ore miner, had struck a deal with six Asian steel makers in February to raise iron ore prices by 65 per cent.

Steel makers also expect a proposed acquisition of Rino Tinto Plc by rival BHP Billiton Ltd to affect prices as it may lower competition by shrinking the number of major iron producers from three to two.