London (Platts)--6Feb2013/840 am EST/1340 GMT

Steel and mining group ArcelorMittal said Wednesday it expects a 20% increase for iron ore shipments in 2013 as new projects complete in Canada, after shipments rose 5.4% to 54.4 million mt in 2012.

The mining operations shipped 28.8 million mt of iron ore at market prices in 2012, 2.6% up on year, the Luxembourg-based company said in an earnings statement.

The group posted weaker Q4 2012 results for mining operations, with both iron ore and coal shipments dropping against the preceding quarter and year-earlier totals, along with lower prices and demand.

In Q4, EBITDA contributions from mining, recently a driver of group results given weaker steel operating results, fell below the group's long steel division.

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ArcelorMittal said that EBITDA attributable to the mining in Q4 more than halved from Q4 2011 and fell 19.4% to $315 million as compared to Q3 "due to the effect of lagged pricing in iron ore [with] a portion of iron ore shipments from Canada and Mexico reference quarter-lagged prices, and lower coal realizations, driven by weaker seaborne market prices."

Projects in Canada to boost iron ore mining and concentrator capacity are ongoing with projects set for completion between Q1 2013 and the first half of this year.

ArcelorMittal Mines Canada is expanding to 24 million mt/year from 18 million mt/year, and the project is on track for ramp up during the first half of this year, it said.

In Liberia, an expansion project entailing a new 15 million mt/year concentrator to replace an existing 4 million mt/year direct shipped ore (DSO) operation at its iron ore mines is earmarked for completion in 2015.

A new iron ore product of 66% Fe will command a premium to reference prices versus discounts on the DSO sold to date, it said.

Cash costs in Liberia are expected to be similar to the current level, based on economies of scale, the company said. The miner is loading Capesize vessels offshore Liberia.

ArcelorMittal's Q4 iron ore production at 14 million mt was 2.1% lower than Q3 and 7.5% lower than in Q4 2011.

Shipments at market price declined 6.7% compared to Q3 "due to continued heavy monsoon weather in Liberia and operational issues in Ukraine," the report said.

Coal production in Q4 at 2 million mt fell 3.6% on Q3 and 11.1% on Q4 2011. Full year coal output was little changed at 8.2 million mt, down 100,000 mt on 2011.

Coal shipped externally and internally at market prices were 1.3 million mt in Q4, up from 1.2 million mt in Q3 and flat on the year earlier period.

ArcelorMittal mines coking coal at the Princeton complex in West Virginia, offering low-vols and mid-vols to seaborne markets. In addition, the company mines coal in Russia and Kazakhstan.

--Hector Forster, hector_forster@platts.com
--Edited by James Leech, james_leech@platts.com

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