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EuroWire – November 2008
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The agreement, reached 29
th
August, affects hourly workers
at plants in Indiana, Ohio, Pennsylvania, New York, South
Carolina, West Virginia, and Minnesota. The 18,000 people that
Luxembourg-based ArcelorMittal employs at 17 facilities in the
US make up almost 6% of its 320,000-strong workforce in more
than 60 countries.
The agreement, hammered out amid talk of a strike by
the workers, provides for a $3 billion capital investment
in ArcelorMittal’s US plants, an increase in the company’s
contribution to pensions for current workers and higher
payments to retirees and fixed health care contributions
through the life of the contract. But the contract’s pay
provisions – a one-time lump sum of $6,000 plus a $1 hourly
increase in the first year and 4% increases in each of the
following three years – indicate a weakening of the ability of
powerful unions to dictate terms to big steel companies.
ArcelorMittal, which produces 10% of the world’s steel, has said
it plans to increase shipments by more than one-fifth by 2012
in response to global demand. The United Steelworkers union
represents 850,000 workers in the United States and Canada.
Its members work in the rubber, chemicals, paper, and oil
industries, as well as in metals.
In other news of ArcelorMittal, on 20
th
August, to increase
its self-sufficiency in the vital raw material of steel making,
the company announced an agreement to buy the Brazilian
iron-ore unit of London Mining Plc for about $810 million.
London Mining Brasil, located in the state of Minas Gerais, was
acquired by the British company only in May 2007, the owner
said in a statement. The exploratory and production unit is
currently expanding its yield of concentrate and lump ore to
3.2 million metric tons per year (mtpy), from 1.4 million tons.
ArcelorMittal intends to raise output to more than 10 million
mtpy with an investment of up to $700 million.
News of the acquisition came two weeks after ArcelorMittal
announced plans to invest $1.6 billion to increase its steel
production in Brazil by two-thirds. Recently, London Mining
reported iron-ore resources of 598.8 million tons at its Brazilian
mine, up from an earlier estimate of 266.3 million tons. Iron-ore
prices have gained for a sixth straight year, and the cost of
coking coal has surged to record highs.
Elsewhere in steel . . .
Russian steel giant OAO Severstal has said it will buy
❈
❈
PBS Coals Corporation (Somerset, Pennsylvania) for about
$1.3 billion in cash. The plan, announced 22
nd
August,
reflects the trend among international steel companies
seeking to guarantee their access to raw materials. The US
coal industry had dwindled by the 1980s, and domestic
steel makers who spun off their coal operations have lagged
their overseas counterparts in buying up coal reserves.
Severstal said PBS Coals commands at least 228 million tons
of in-place coal reserves. PBS operates six underground
and six surface coalmines near Severstal’s North American
production centres. The mines have production capacity
of more than 4 million tons of metallurgical coal per year,
Severstal said in a statement announcing the planned
acquisition.