Congo’s South Kivu governor suspends mining operations in province
The decision will hit artisanal miners of metals such as gold and tin hard, as they are the region's dominant producers.
The company hasn’t given up on iron-ore production.
ArcelorMittal (NYSE:MT), the world’s biggest steelmaker by shipments, said Friday it will miss its target for full-year earnings as it bears the brunt of lower commodity prices, despite swinging to a second-quarter net profit for the first time in nearly two years.
The Luxembourg-based company said higher steel and iron-ore shipments more than offset lower prices in the three months to the end of June compared with a year earlier.
ArcelorMittal swung to a net profit of $52 million in the second quarter, a substantial improvement from a $780 million loss in the same period last year, as demand for steel rose in Europe and North America. Sales rose 2.5% to $20.7 billion.
In recent years, the firm has put most of its investment money into mining operations, betting that they would generate more profit than steel. But low iron ore prices have taken a toll, and operating income in mining fell nearly 19% in the quarter, to $233 million.
While the softening of iron ore prices may hurt the relatively small mining segment at ArcelorMittal, that could be countered by stronger demand for the steel that makes up most of the company’s business. The company, in fact, hasn’t given up on iron-ore production and it is buying stakes held by BHP Billiton Ltd. and Areva SA in the Nimba deposit in Guinea.
ArcelorMittal, with presence in Europe, Asia, Africa, South and North America, has downsized its operations to adapt to changing demand and could be poised for higher profitability if growth in crucial markets like Europe and the United States continues.
Since 2008 the steelmaker has reduced $4.8 billion in costs and it’s targeting a further $3 billion in savings by 2015. It has shrunk its workforce by more than 80,000 and closed plants in Belgium and France.
ArcelorMittal’s steel has been used in famous landmarks around the world, including the new One World Trade Center in New York City, the Grand National Theatre of China in Beijing, the new Reichstag in Berlin and the world’s first-ever zero-emission polar research station, Princess Elisabeth Antarctica.
International sports venues have also been built with ArcelorMittal steel, from Johannesburg’s Soccer City to the Cape Town Stadium, both used for the 2010 World Cup in South Africa, to the Wembley Stadium in London.
