By Alex MacDonald
ArcelorMittal (MT) has agreed to sell its 50% stake in South
African manganese explorer Kalagadi Manganese Ltd. for 3.9 billion
rand ($447 million) as it continues to sell non-core assets to pay
down debt.
The world's largest steelmaker, which accounts for 6% of the
world's steel output, said Thursday it has agreed to sell its stake
to Mrs. Daphne Mashile-Nkosi or her nominee, which may be a
consortium consisting of shareholders from Kalahari Resources or
other third parties. Mrs. Mashile-Nkosi is the executive
chairperson of Kalahari Resources, a majority black-owned company
that she helped create and in which women occupy the top
positions.
Kalagadi Manganese operates in the Northern Cape Province of
South Africa and is jointly owned by ArcelorMittal, Kalahari
Resources, which has a 40% stake, and the Industrial Development
Corp. with a 10% stake. The three farms on which Kalagadi Manganese
holds mining rights are believed to contain 960 million metric tons
of manganese ore. A recent exploration program has identified 102
million tons of mineral resources there.
The deal is subject to regulatory approvals and the waiver of
preemptive rights of the other shareholders.
ArcelorMittal is seeking to reduce its net debt through a
combination of cost-saving measures and sale of non-core assets
amid weak steel demand, particularly in Europe. Since September
2011, it has sold just over $3 billion in non-core assets.
It has also announced plans to permanently shut four blast
furnaces in Europe and has temporarily idled several others.
Write to Alex MacDonald at alex.macdonald@dowjones.com
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