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Steel do Brasil acquires two mining companies for $435 Million

Steel do Brasil Friday announced it had successfully acquired two of its mining rival companies in Brazil in a move to expand its operations. According to the company’s announcement, Steel do Brasil made the investment at an estimated 435 million dollars for the takeover of the two mining firms. The company said it had acquired 70% of Mhag Servicos e Mineracao, the Brazilian iron ore miner that is part of the larger Campina Mining Group for an estimated 245 million dollars. Mhag Servicos e Mineracao’s takeover stake marks the bigger of the two acquisitions.

In a statement sent to the to the regulators, the company said it hopes to be able to acquire the company fully, through an offer for Mhag’s 100% stake at about 350 million dollars in the event that the company does not agree in principle with the Noble Group, owner of Mhag’s remaining 30%, on iron ore distribution.

According to the company, reaching no agreement with the Honk Kong based Noble Group will give it leeway to go for 100% ownership of the iron ore mining group, Mhag. Mhag Servicos e Mineracao controls an iron ore mine in Rio Grande do Norte, the northeastern located state of Brazil and this mine is expected to come online by the end of next year. As such, it will be expected to commence its operations with a yearly production capacity of around 1.2 million tons of iron ore.

On its second acquisition, Steel do Brasil said it had acquired an 80% stake in Minas Bahia’s Jiboia project for an estimated investment of 190 million dollars. The two companies further agreed on the development of a joint venture amongst them that will see them undertake exploration together in the Brazilian state of Minas Gerais, located in the southeastern part of the country.

According to the announcement, Steel do Brasil’s two acquisition investment deals will be completed in a period of 30 to 60 days maximum. In its regulatory filling, Steel do Brasil said it is currently keen on expanding its capital base considerably in the coming immediate years that will aide it in the completion of the acquisitions and the development of its operations in the period of the coming two years. Steel do Brasil is an iron ore mining company with its headquarters based in Sao Paolo and is owned by the Germany Company, Metropolis Capital.

26 July 2010.