It can only get bigger than this. Sunday’s Arcelor-Mittal merger, the biggest in the global steel business, can only be the beginning — the surface of what appears on the surface. For Lakshmi Niwas Mittal, global steel tycoon, and the world’s richest person (once more it’s time to revise his ranking), from here on, it’s literally got to be one helluva long Journey to the Centre of the Earth. That is, in case, he seeks to control what’s at the core of this planet.
Why are we telling you this?
We are telling you this because Sunday’s conclusion of an eventful five- the month-long campaign finally makes L N Mittal the undisputed monarch of the global iron and steel business that is at the heart of the world’s manufacturing establishment. And steel, as we know it, has its applications in everything to do with you and me — from industrial machinery and goods to construction material, transportation equipment, household appliances, armaments, ships, automotive parts, baked enamel finishes for automotive and appliances, catalysts, medicines, biochemical, metallurgy, paints, printing, inks, plastics, cosmetics, pins, artists' colours, laundry blue, paper dyes, fertiliser ingredients, industrial finishes, pigments, polishing compounds, ferrites, electronics, magnets, high-frequency cores and much more.
So, what does ArcelorMittal mean for LNM?
The world’s total steel capacity, as it stands now, is roughly 1.2 billion tonnes. At a combined capacity of 130 million tonnes of steel that ArcelorMittal fetches him, and LNM gets to control about 10% of the global steel capacity. His nearest competitor Nippon Steel controls barely 3%. Should that be enough for Mr Mittal? That depends on what sense the world makes of his deal-making capacity. But to give you a rough sense of what could be in store, while Sunday’s deal is significant and certainly huge, there’s plenty more iron right below the surface.
And it’s still anybody’s business. Let’s tell you how:
While it’s true that ArcelorMittal gives LNM control of 10% of global steel output, it makes him master of only .5% of the total iron equivalent ores available on the earth’s surface. There’s much more in the deepest recesses of this planet.
To give you an idea, the Earth’s mass, or weight, is 6,587 billion billion tonnes (rpt billion billion tonnes). Iron (Fe) comprise 35.1% of that mass, or 2,312 billion billion tonnes (rpt billion billion tonnes). Most of it is buried in the Earth’s core, 3,000 km below the surface, and still beyond the reach of the modern mind and technology.
Geologists say the Earth’s core comprises a fluid outer core and a solid inner core. The solid inner core is roughly the size of the Moon and the outer liquid core is the size of Mars. The inner core is an iron ball, 1,500 miles across, covered by a liquid casing, and 4,300 miles wide. For billions of years, molten iron has seeped through fissures and cracks right through the earth’s mantle and solidified as ore across vast tracts of the earth’s surface or crust. Iron ore forms 5% of the earth’s crust. And 98% of the ore goes into the making of steel. Geologists estimate worldwide iron ore resources at 800 billion tonnes, containing more than 230 billion tonnes of iron. Right now, about 1.2 billion tonnes of that iron finds its way to the marketplace each year. From now on, ArcelorMittal will account for 130 million-tonne of that market.
There’s plenty more to be mined. Good luck Arcelor Mittal. So, let the party begin.
Provided the world hasn’t satiated its appetite, of course.
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