UK -based Indian steel magnate Lakshmi Mittal in new South African steel control bid

JANUARY 16, 2004

UK -based Indian steel magnate Lakshmi Mittal is believed to have embarked on a new initiative to gain total control of the South African steel industry. Mittal’s LNM group is making a direct bid for South Africa’s second largest steel producer, Highveld Steel and Vanadium Corp. The authorities may take some time to approve LNM’s request for control of Iscor, which it turned around to financial viability after it entered into a Business Assistance Agreement (BAA) with Iscor two years ago.

Mittal's LNM already holds a 49.9 percent stake in the country’s largest steel producer, the former state-owned Iscor. Mittal is awaiting clearance from South Africa’s Competitions Board to allow him to take full control of Iscor. LNM has gradually acquired additional shares in Iscor as part of the BAA for effecting savings by providing improved technologies

The move to acquire Highveld Steel now might be aimed at avoiding the long delay that may be caused by the required approval for Iscor. The current attempt to acquire Highveld Steel would also not require LNM to get approval from Iscor shareholders.

LNM has huge international steel interests, providing Iscor and others with access to wider markets. “LNM might also be more able than Iscor to supply the capital expenditure which Highveld will require in future, although there will also be the need to rationalise production at Highveld.