Arrium Ltd. (ARI), which rebuffed a A$1.2 billion ($1.24 billion) takeover offer from a Noble Group Ltd. (NOBL) and Posco-led consortium last month, said Geoff Plummer will step down as chief executive officer by the end of next year.
Plummer agreed to stay until Dec. 31, 2013, if required by the board, giving enough time “to enable a smooth and measured leadership transition,” Peter Smedley, chairman of the Sydney- based steelmaker and iron ore producer, said in a speech today at a shareholder meeting in Melbourne.
Plummer’s resignation plan came as Arrium, which changed its name from OneSteel Ltd. in July to reflect its focus on mining, today kept its full-year iron ore sales target unchanged at as much as 9 million metric tons, up from 6.3 million tons in the previous year. His decision to retire has nothing to do with the rejected takeover bid, Smedley told reporters after the meeting.
“By end of next year, Geoff Plummer will have been in the role approaching nine years,” Smedley said. His term “will conclude with the ramp up of the iron-ore expansion, the further consolidation of the mining consumables business and will also have seen significant restructuring of the steel and recycling businesses.”
Arrium shares rose 0.7 percent to 72 Australian cents in Sydney trading as the benchmark stock index added 0.6 percent.
Open to Talks
Arrium remains open to any future takeover discussions should anyone make a fair offer for the company, Smedley said. Noble-Posco (005490)’s bid of 88 cents a share undervalued the company, he reiterated.
Exports of iron ore will increase in the second half from increased production at its Middleback Ranges and Southern Iron mines, Arrium said today in a statement. The company sold 1.6 million metric tons of iron ore in the three months ended Sept. 30, down from 1.91 million tons in the previous quarter. Its average realized price for the quarter was about $83 a ton, $26 lower than in the June quarter.
Arrium is spending A$200 million expanding its port at Whyalla, with annual capacity expected to be 13 million tons a year after the expansion, up from the 12 million tons previously expected, the company reiterated today.
To contact the reporter on this story: Soraya Permatasari in Melbourne at firstname.lastname@example.org
To contact the editor responsible for this story: Jason Rogers at email@example.com