Canada's iron ore mining stocks rise on Arcelor stake sale

Wed Jan 2, 2013 2:44pm EST
 
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* Arcelor in $1.1 bln deal to sell small stake in Canada operations

* Deal brings Korean, Taiwanese investment to iron region

* Labrador Iron Mines shares up 18 percent to C$1.30

* Rising iron ore prices also support share gains

TORONTO, Jan 2 (Reuters) - Shares of Canada's iron ore miners rose on Wednesday, buoyed by rising iron ore prices and ArcelorMittal's $1.1 billion deal to sell a minority stake in its Eastern Canadian operations to an Asian consortium.

New producer Labrador Iron Mines Holdings Ltd led the way, climbing more than 18 percent to C$1.30 in high-volume trading on the Toronto Stock Exchange. Explorer Champion Iron Mines Ltd was up nearly 11 percent at 71 Canadian cents.

The gains came as the world's largest steelmaker said it agreed to sell a 15 percent stake in ArcelorMittal Mines Canada to a consortium that includes South Korean steelmaker POSCO and Taiwan-listed China Steel.

Iron ore is the main ingredient used to make steel.

"Certainly, the one thing that it does do, is it highlights the perceived value amongst steelmakers of the iron operations in the Labrador Trough," said Adam Low, a base metal mining analyst with Raymond James Ltd.   Continued...