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June 2 (Bloomberg) -- Gerdau SA, Latin America’s largest steelmaker, said it’s in talks with 20 companies including steel and mining producers for a possible partnership to develop its 2.9 billion metric tons of iron-ore reserves.
The company, based in Porto Alegre, Brazil, will decide as early as the end of the year whether to seek a partner, sell shares of the mining business or develop the deposits with its own resources, Chief Executive Officer Andre Gerdau Johannpeter said in an interview in Sao Paulo today.
“There are several alternatives: doing it ourselves, with a steel partner, with a trading partner, a mining partner or an IPO,” Johannpeter said. “The idea is to make a decision by the end of the year.”
Gerdau is exploring strategic options for its iron-ore assets as steelmakers look to capitalize on higher metal and mineral prices. Chief Financial Officer Osvaldo Schirmer said May 31 that Gerdau will appoint banks in coming weeks to assess the mineral reserves and estimate how much surplus iron-ore it will be able to produce after supplying its own steel plants.
Gerdau rose 6 centavos, or 0.4 percent, to 16.87 reais in Sao Paulo trading today. It has fallen 26 percent this year, more than a 7.3 percent loss for the benchmark Bovespa index.
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