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ArcelorMittal Mines Canada and its affiliates will retain an 85% interest in the Labrador Trough iron ore mining assets.
As part of the transaction, POSCO and China Steel will enter into long-term iron ore offtake agreements proportionate to their joint venture interests.
The consortium, which includes South Korea-based POSCO, Taiwan-based China Steel and other financial investors, will pay for the transaction in cash.
The deal would provide POSCO and China Steel with greater access to supplies of iron ore used for steel production. The investment could boost China Steel’s iron ore feedstock self-sufficiency ratio by 4.2% to 11.6%, the company said.
The deal is subject to various closing conditions, including regulatory clearance by the Taiwanese government, and is expected to close in two instalments in the first and second quarters of 2013, China Steel said.
A consortium led by POSCO and China Steel Corporation has agreed to buy a 15% stake in a Canadian iron ore mine operated by ArcelorMittal for $1.1 billion, China Steel said on Wednesday January 2.