REFILE-UPDATE 2-ArcelorMittal to sell $1.1bln stake in Canadian unit

Wed Jan 2, 2013 5:52am EST
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* POSCO, China Steel, ArcelorMittal long-term iron ore pact

* ArcelorMittal battles sluggish steel demand

By Joyce Lee and Robert-Jan Bartunek

SEOUL/BRUSSELS, Jan 2 (Reuters) - ArcelorMittal, the world's biggest steelmaker, will sell a 15 percent stake in one of its Canadian iron ore operations, raising $1.1 billion to help pay off debt at a time of sluggish demand.

The group, which makes about 6-7 percent of the world's steel, will sell the stake in ArcelorMittal Mines Canada to a consortium including South Korean steelmaker POSCO and Taiwan-listed China Steel, it said on Wednesday.

It is the latest in a series of steps to raise funds as slow global economic growth and spending cuts in Europe dampen demand for steel used in the car and construction industry.

"It's one of the more readily disposable parts of the business, and given they need to reduce debt I don't think its a massive surprise they are selling it," said Nomura analyst Neil Sampat.

ArcelorMittal wrote down the value of its European business by $4.3 billion last month and has had its credit rating cut to non-investment grade by all credit rating agencies.   Continued...