According to RBC Capital Markets, when ArcelorMittal (NYSE:MT) begins to report mining assets separately, the company may end up ranking as the fifth largest iron ore producer in the world.
Because of changes in global reporting rules, the giant steelmaker, is about to separate out its mining business into its own division. Why that's important is it is probable the group is likely to emerge as the world's No. 5 iron ore miner.
According to an exhaustive report by RBC Capital Markets, at the end of the first quarter 2011, when ArcelorMittal reports mining assets separately, AM Mining could rank as the fifth largest iron ore producer globally, through forecasts to 2015. This year, RBCCM believes AM Mining could have the second-largest EBITDA contribution to the group (22%), and account for more than 50 percent of AM group growth capex.
What this could mean, according to RBCCM, is with mining assets reallocated from steel divisions to AM Mining, management will be forced to re-evaluate performance metrics across the group. For a group owned to the tune of 40 percent by one person, ArcelorMittal has come a long way in a relatively short time: internal change has been the order of the day for years.
Arcelormittal closed Friday at $35.75, falling $0.44, or 1.22 percent.
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