Consolidated Thompson Offers $120 Million For Canada's Wabush Mines

   DOW JONES NEWSWIRES 
 

Consolidated Thompson Iron Mines Ltd. (CLM.T) offered to buy the Wabush Mines joint venture from United States Steel Corp. (X), ArcelorMittal (MT, MT.AE) and Cliffs Natural Resources Inc. (CLF) for a total of US$120 million.

The deal will be financed with existing cash and credit facilities available to the Canadian mining company.

U.S. Steel and ArcelorMittal accepted the offer on the condition that Cliffs not exercise its right of first refusal to acquire their interests in the iron-ore producer on the terms offered by Consolidated. The right of first refusal expires Oct. 19.

If Cliffs does not exercise its right and does not accept Consolidated's offer, Consolidated will have a binding agreement to acquire U.S. Steel and ArcelorMittal's collective 73.2% interest in joint venture for a total of US$87.8 million.

ArcelorMittal, which would receive US$34.28 million, said its stake in Wabush Mines is no longer a core part of its mining strategy. The mine represented 31 million tons of iron ore reserve and 1.2 million tons of iron ore produced for ArcelorMittal in 2008.

Wabush Mines owns and operates iron ore mining and pellet facilities in Newfoundland and Labrador and Quebec, Canada.

Last year, ArcelorMittal filed a lawsuit in Canada against the other two owners of Wabush Mines, saying they had reneged on a deal to let ArcelorMittal buy them out.

-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357; [e-mail]