ArcelorMittal signs deal to sell its steel mill and iron ore mine in Bosnia

SARAJEVO (Reuters) -ArcelorMittal , the world's second-largest steelmaker, said it signed a deal on Friday to sell its operations in Bosnia and Herzegovina, comprising a steel mill and an iron ore mine, to the Bosnia-based Pavgord Group.

The Luxembourg-based company owns the steel mill in the central town of Zenica and the iron ore mine in the northwestern town of Prijedor, which together employ about 2,700 people.

The new owner will take over all employees, according to the deal, which is expected to be completed in the third quarter of 2025, after all conditions for its implementation have been fulfilled, ArcelorMittal said in a statement.

It is expected the company will register an accounting loss of $0.2 billion, excluding the revenue from the sale, according to the statement.

"Over the years the company has invested significant funds and efforts to keep ArcelorMittal Zenica and ArcelorMittal Prijedor within its group," it said in the statement.

"But after a detailed strategic analysis, it was concluded that the sale is the best solution for the further development of the operation and employees," it added.

ArcelorMittal, which has operated in Bosnia for 21 years, reported losses of 276.3 million Bosnian marka ($162.6 million) in 2023 and 2024 due to a drop in steel demand in Europe.

In Bosnia, Pavgord Group owns local aluminium producer Alumina, Bosnia's largest exporter last year, and a majority stake in Bosnian bauxite mining company Boksit.

(Reporting by Daria Sito-Sucic; Editing by Jan Harvey and Susan Fenton)