Hot rocks

21 May 2008 By John Foley Follow @johnsfoley

The steelmaker paid a high price for its 15% stake in the Australian coal producer, valuing the group at $4bn. But with coal prices spiking and ArcelorMittal intent on securing supply, a full takeover could be a smart insurance policy.

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ArcelorMittal bought a 14.9% stake in Macarthur Coal and and revealed plans to discuss its position with the Australian company's board. The Luxembourglisted steelmaker is Macarthur's biggest customer, using its pulverised coal in steel production.

Arcelor paid $605m for the stake, a 9% premium to Tuesday's closing price (click here for a share price chart). It bought 10.4% from Nathan Tinkler, an Australian mining magnate. The rest was bought from Ken Talbot, Macarthur's founder, who retains just under 20% of the company.

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