ArcelorMittal, Nunavut battle for Baffinland's iron ore in Canadian Artic

Steel giant ArcelorMittal and Nunavut Iron Ore Acquisition Inc are locked in a bidding war for Canadian coal miner Baffinland Iron Mines Corp with both suitors raising their offers over the New Year.

At stake is the Toronto-based Baffiinland's 365 million tonnes of undeveloped iron ore reserves at its Mary River project in the high Artic of Canada that will require an investment of C$4 billion to develop.

Over the weekend,Luxemburg-based ArcelorMittal, raised its offer from C$1.25 to C$1.40 per share, valuing the Canadian miner at C$550 million.

Nunavut, which has been created for the acquisition of Baffinland by the US-based private-equity firm Energy & Minerals Group that already holds about 10.5 per cent of Baffinland's shares, reacted immediately by raising its offer to C$1.45 per share, valuing the company at about C$570 million.

This is the third time that both suitors have raised their bids since Nunavut launched a 90 Canadian cents a share or C$274 million hostile bid in September 2010 for Canada's junior iron ore explorer Baffinland. (See: PE firm launches hostile bid for Canada's Baffinland Iron Mines)

But Nunavut offer is for 60 per cent of Baffinland, while the world's largest steelmaker's offer is for the whole of the company.