ArcelorMittal eyes mines in Venezuela

BUENOS AIRES: ArcelorMittal is seeking talks on a possible iron-ore investment in Venezuela with the government of President Hugo Chavez, who nationalized utilities and threatened to seize a foreign-owned flat-steel producer. “We are interested in Venezuela,” CEO Lakshmi Mittal said in an interview at the International Iron and Steel Institute in Berlin. “We're interested in hearing what the government's position is.”

Steelmakers such as ArcelorMittal, the world's largest, are scrambling to secure raw materials as surging demand from China pushes up prices. The company may enter Venezuela as businesses including Exxon-Mobil Corp, the biggest publicly traded oil operator, and ConocoPhillips, the second-largest US refiner, are exiting. The two oil companies are pulling out after Chavez demanded they cede control of joint-venture projects. Luxembourg-based steelmaker Ternium SA agreed to cut prices to stop him from nationalizing its Siderurgica del Orinoco mill.

Venezuela has more than 2 billion metric tons of proven reserves of iron ore in southeast Guayana state, according to the government. An investment would further ArcelorMittal's strategy of cutting iron-ore costs by expanding in nations with deposits.

“We would like to participate in all the Latin American countries,” Mittal said. ArcelorMittal plans to get at least 80% of its iron ore from captive mines, he said. The company also plans to develop deposits of the ore in Liberia and Senegal.