KIEV, June 14 - Arcelor Mittal, the worldâ€™s largest steel maker, plans to invest up to $10 billion in development of the steel and mining sectors in Ukraine, President Viktor Yushchenko said Thursday.
Yushchenko cited his meeting with Laksmi Mittal, the executive director of Arcelor Mittal, which owns the largest steel producer in Ukraine, Mittal Steel Kryvy Rih.
Yushchenko, who toured Mittal Steel Kryvy Rih facilities on Thursday, said the company has been considering a number of investment projects, but refused to elaborate.
â€śWe are studying the sectors, we are studying territories and timing of the investment projects,â€ť Yushchenko said at a press conference in Kryviy Rih.
The pledged investments underscore Mittalâ€™s growing interest in Ukraine, the worldâ€™s seventh-largest producer of steel, indicating the company has been seeking to expand in the region.
Mittal has long been interested in developing a large deposit of iron ore, known as Kryviy Rih Oxidized Ore Mining Plant. Yushchenko said he discussed the project with Mittal on Thursday.
The deposit needs an investment of at least $800 million to start production of iron ore. Mittal needs iron ore to supply to its steelmakers in Romania, Ukraine, Poland and the Czech Republic, according to Tatiana Teliatnikova, said an analyst at Prometal, a steel sector analysis agency.
Meanwhile, Mittal has been facing competition from a Russian-Ukrainian consortium between Metalloinvest of Russia and Smart-group of Ukraine that has been seeking to develop the deposit.
The Ukrainian government, led by pro-Russian Prime Minister Viktor Yanukovych, had earlier tentatively selected a business proposal from the consortium for the development of the deposit. The meeting between Yushchenko and Mittal suggests that the situation may change.
â€śThe decisions must be public and transparent,â€ť Yushchenko said, apparently criticizing the government.
Mittal Steel purchased its Ukrainian assets, formerly known as Kryvorizhstal, in October 2005 by spending more than $4.8 billion for 93%stake. This was Ukraineâ€™s first transparent privatization auction and generated more cash for the government than any other selloff over the past 10 years.
Mittal earlier planned to invest $130 million in development its iron ore mining division in a bid to boost iron ore output to 30 million metric tons by 2009.
In 2007 the company said it plans to increase iron ore output by 12% year-on-year to 20.5 million mt, up from 18.29 million mt produced in 2006.
Meanwhile, Mittal Steel Kryviy Rih also announced on Thursday that it would be changing the name of the Ukrainian operation to reflect last yearâ€™s merger between Mittal and Arcelor.
The Ukrainian company, which produces up to 20% of Ukrainian steel, will from now on be known as Arcelor Mittal Kryvy Rih, according to a company official.
Mittal Steel Kryviy Rih produced 7.59 million tons of steel in 2006, up from 6.95 million tons produced in 2005.(sb/ez)