Sierra Leone woos miners to clean energy with $11 billion plan
Most mining firms rely on their own diesel supplies to extract iron ore, diamonds, rutile and bauxite in the resource-rich country.
US Steel Corp is locked in a spat with rival steelmaker Cleveland-Cliffs Inc over a confidentiality pact that would allow the latter to participate in a sale process that is underway, people familiar with the matter said on Wednesday.
US Steel has not opened its books to Cliffs since announcing on Aug. 13 it will explore a sale, even as it accepts initial bids this week from other potential acquirers, because Cliffs will not agree to its conditions, the sources said.
Cliffs has refused to sign a six-month standstill agreement that would prevent it from challenging US Steel’s board of directors, because it wants to keep its options open as it pursues the company, the sources said.
US Steel has made the standstill a condition to allowing Cliffs to carry out due diligence and participate in its sale process, the sources added. It has also told Cliffs that all bidders are being granted access to its sale process on the same terms, according to the sources.
Cliffs opened its books to US Steel, given that close to half the value of its $7.1 billion offer is in stock, the sources said. Cliffs has also delivered letters to US Steel from Wells Fargo, JPMorgan, UBS, MUFG and Truist Securities attesting to their commitment to fund its bid, the sources added.
The banks did not need to review US Steel’s books to commit to a deal because of the merits of the potential combination, according to one of the sources.
Cliffs also did not need access to US Steel’s books to press ahead with its bid, but has tried to negotiate a confidentiality agreement so it can be part of the sale process, that source added.
US Steel has said it has received interest from “multiple other parties” in a potential deal involving the entire company or some of its assets, but has not named them. Reuters has reported that ArcelorMittal is one of the parties that has been working on a potential bid for US Steel.
It remains unclear whether US Steel will agree to a deal with any party. The sources requested anonymity to discuss confidential matters. Representatives for US Steel and Cliffs declined to comment. ArcelorMittal did not immediately respond to requests for comment.
Cliffs would break into the world’s top 10 steel producers, which are mostly from Asia, should its bid for US Steel succeed. Cliffs’ commitment to keeping US Steel’s blast furnaces running has won it the support of United Steelworkers. The union’s workers at US Steel will only support Cliffs as an acquirer, its international president Thomas Conway has said.
Cliffs CEO Lourenco Goncalves has said in interviews and earnings calls that criticism of blast furnaces’ carbon emissions ignores that electric arc furnaces cannot make the steel many car makers want. US Steel has been gradually transitioning to electric arc furnaces, which are cheaper to run and more environmentally friendly.
US Steel on Monday forecast third-quarter profit above Wall Street estimates and said each of its segments outperformed prior expectations, driven by a decline in raw material costs and higher prices for flat-rolled products. It said its forecast included the projected impact from the United Auto Workers (UAW) strike, which has weighed both on US Steel and Cliffs given that car makers are major customers.
(By Greg Roumeliotis, Anirban Sen and David Carnevali; Editing by Stephen Coates)
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