ArcelorMittal has entered into a "business cooperation agreement" with a Hong Kong company, China Oriental Group Co. Ltd., as well as an agreement with that company's controlling shareholders, that the world's largest steelmaking group says will strengthen its position in the Chinese steel market.
The investment is reported to be about $2.2 billion.
“We have made no secret of our wish to participate more actively in China’s fast growing steel market, and the agreements we have signed are a major step forward in delivering that strategy," stated president and CEO Lakshmi Mittal. "Not only will this strengthen our position in China, it will also provide the China Oriental Group with the expertise and experience it needs to become a leading producer of heavy sections in China.”
China Oriental’s operation in Hebei province is near to iron ore reserves, deep-water ports, and railways. Most of its products are sold domestically as semi-finished billets and strip, but it also processes products for the construction and machinery industries.
ArcelorMittal, alone among global steelmakers, has made efforts to gain ownership of existing steelmaking assets in China. It has had an application pending since early 2006 for a minority ownership stake of Laiwu Steel — a carbon steel flat- and long-products producer. Like several of its European and Asian rivals, ArcelorMittal also has various joint-venture holdings in the country, with domestic producers.