LONDON--Steel titan ArcelorMittal MT, +4.72% has signed a five-year agreement with Canada-based Evrim Resources Corp. (EVM.V) to explore for iron ore, a key steelmaking ingredient, in Mexico.
Under the terms of the agreement, ArcelorMittal's Mexican unit ArcelorMittal Servicios Minerometalurgicos de Occidente S.A. and Evrim will jointly fund iron ore exploration programs in Mexico, Evrim said Wednesday. Following the discovery of a deposit, ArcelorMittal will be solely responsible for funding the project's development. ArcelorMittal will own 100% of all projects taken to the development stage, subject to a sliding scale royalty on iron ore production and a separate royalty on all other commodities payable to Evrim.
The parties have agreed to a firm commitment for the first two years of the agreement.
"We look forward to working with ArcelorMittal to find and develop new iron ore deposits for processing at their facilities in Mexico," said Paddy Nicol, chief executive of Evrim in a statement Wednesday.
ArcelorMittal has been expanding its iron ore production with a view to producing 84 million metric tons of iron ore annually in 2015, up from 15.4 million tons last year. ArcelorMittal has iron ore mines in Canada, Liberia, Ukraine and Kazakhstan.
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