The Australian Financial Review reported that Arrium CEO Mr Geoff Plummer has defended the company’s rejection of a AUD 1 billion Korea backed takeover bid, arguing a doubling of production at its iron ore mines in South Australia will provide a buffer against falling commodity prices and the company’s AUD 2 billion debt.

In his first public comments since Arrium’s board dismissed a 75¢ a share offer from the Steelmakers Australia consortium, which is made up of South Korean steel giant Posco and Hong Kong commodities trader Noble Group, Mr Plummer said the bid is timed to coincide with a sharp dip in the iron ore price.

He said “When the bid was made it really reflected a couple of weeks where the iron ore price had been at recent lows.”

He said “The iron ore prices have come back almost exactly USD 20 a tonne since those lows and I think most people still forecast ­further strengthening.”

Arrium, which was called OneSteel until July, makes steel and mining consumable products and produces iron ore from its mines in South Australia.

Source - The Australian Financial Review

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