The world's biggest steelmaker ArcelorMittal has delayed the launch of a planned $1.5 billion iron ore mine in Liberia as a result of falling demand, the company said on Wednesday.
ArcelorMittal, which reported slightly worse than expected first-quarter results in April, has said it expects world steel demand to fall by 15-20 percent this year, and that it will lay off nearly 1,000 workers in the United States.
If we cannot sell the iron ore it becomes difficult for us to continue on the pace that we thought we would be on by now, company spokesman Arthur Massaquoi said on a conference call with journalists travelling with a United Nations Security Council delegation to the West African country.
ArcelorMittal is a key investor in the poor former British colony, whose President Ellen Johnson-Sirleaf has made attracting foreign investment into its natural resources a centrepiece of her efforts to rebuild the country after a 1989-2003 civil war.
As a consequence of the global crisis ... after reviewing all of our operations we thought it would be necessary at this moment to slow down our operations, Massaquoi said.
Earlier this year chairman and chief executive Lakshmi Mittal said he expected prices for iron ore, the main steelmaking raw material, to fall substantially in 2009.
We earlier envisaged July of this year, then later on we thought it would not be feasible and we thought it will be next year, Massaquoi said when asked when the firm originally planned to start shipping ore from Liberia.
I cannot say definitely what the time frame looks like.
ArcelorMittal had subcontracted some railway rehabilitation work, Massaquoi said, as a result of which the subcontractor had taken on 1,200 workers. But he added the steelmaker had now terminated that contract, and cut 80 jobs of its own in Liberia.
The firm employs 570 people in Liberia.
On Tuesday, the firm said it may have to halt production at its loss-making unit in Kazakhstan.
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