Steelmakers, Iron Ore Miners Explore New Roles

According to a recent article in the Wall Street Journal, a number of major steelmakers are reverting to the the old industry paradigm of relying on ore from producers by pursuing vertical integration through mine ownership. Conversely, giants like Vale of Brazil are investing in domestic steel-processing facilities in order to grab a share of steelmakers' China-driven profits.

The swing back towards vertical integration is most evident in Brazil, which has vast reserves of iron ore that remain either untapped or up for grabs.

"Brazil is the strategic place for the steel industry," says Lakshmi Mittal, the chief executive of ArcelorMittal, the world's largest steelmaker by production. "It has the raw materials. It has the market. It has the growth."

In the past month, steelmakers and miners have announced major investments in Brazil's fast-growing economy.
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Steelmakers have focused on Brazil in part because Australia's iron ore reserves are controlled by BHP Billiton and Rio Tinto, meaning there are almost no opportunities for a newcomer to gain a foothold in the market.

> Steelmakers and miners swapping roles as demand grows [WSJ via Australian]