October 12, 2008

ArcelorMittal wants amicably settlement of disputes in US

Dow Jones reported that ArcelorMittal would like to amicably resolve two lawsuits it has filed in the past three months in the US and Canada regarding the initial sale of Sparrows Point and the acquisition of iron ore producer Wabush Mines from US Steel and Cleveland Cliffs.

ArcelorMittal filed a lawsuit with the Supreme Court of the State of New York in May, claiming more than USD 540 million in compensation from E2 Acquisition, a consortium spearheaded by Esmark Inc after it failed to fulfill a USD 1.35 billion contract to buy Sparrows Point, a steel mill which produces 3.9 million metric tons of crude steel annually. The lawsuit came a day after ArcelorMittal completed the sale of Sparrows Point to Russian steel maker OAO Severstal for USD 810 million, net of debt.

ArcelorMittal had filed in March a lawsuit in Canada against two owners of Canada's Wabush Mines, saying they had reneged on a deal to let ArcelorMittal buy them out. ArcelorMittal agreed to buy out US Steel Canada Inc and Ohio based Cleveland Cliffs Inc's stakes in Wabush mines before the contract was breached without disclosing reasons. ArceloMittal wants the Ontario Supreme Court of Justice to force the two companies to comply with the contract and also pay USD 400 million in compensation or then pay USD 1.3 billion for failure to fulfill the contract.

Mr LN Mittal CEO of ArcelorMittal said that "I am surprised by the situation that emerged among the steel companies whereby one breached it's contract to buy Sparrows Point steel and the other two breached their contract to sell their stakes in Wabush Mines to ArcelorMittal.”

He added that "ArcelorMittal does not like to file lawsuits among peer groups. It will always be available for discussion to" resolve the issues amicably.”