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ALLETE (ALE) to Supply Electricity to ArcelorMittal Mine

Minnesota Power, the low-cost electric utility holding of multi-services company, ALLETE, Inc.ALE , has inked a deal with ArcelorMittal MT to supply electricity to the Minorca mine for a decade through 2025.

The Minorca mine, located near Virginia, is wholly owned by ArcelorMittal, which is at present the world's largest steelmaker. The mine annually produces approximately 3 million tons of customized iron ore pellets at its blast furnace near Chicago.

This long-term agreement testifies to Minnesota Power's commitment to supply energy to the Iron Range, which has a long history of iron mining in four major deposits. The supply agreement will allow ArcelorMittal to meet energy needs at competitive rates.

ALLETE has been consistently expanding its Clean Energy portfolio having acquired a 100.5-megawatt ("MW") Pennsylvania-based wind farm, Armenia Mountain, from The AES Corporation (AES) in July and a combined 97.5-MW wind generation facility, comprising the Chanarambie and Viking wind farms, from a unit of EDF Renewable Energy in April, both acquisitions through its wholly owned subsidiary, ALLETE Clean Energy. These initiatives will enable ALLETE to meet stringent environmental regulations pertaining to carbon emissions during electricity generation.

Last week, U.S. Water, the investor-owned water utility holding of ALLETE closed the acquisition of A and W Technologies for a sum of $9 million (read : ALLETE Unit Buys A and W Technologies, Expands Presence ).

ALLETE reported impressive third-quarter 2015 earnings of $1.23 per share, which surpassed the Zacks Consensus Estimate of $1.00 by 23% and improved 26.8% on a year-over-year basis.The company has also raised its 2015 earnings per share guidance to the range of $3.35 to $3.50 from 3.20 to $3.40 per share earlier, primarily owing to strong project management performance in ALLETE Clean Energy's development of a wind facility for customers and its success in reducing expenses through an active cost reduction program.

Zacks Rank

ALLETE currently holds a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the same industry are Korea Electric Power Corp. KEP and Huaneng Power International, Inc. HNP , both sporting a Zacks Rank #1 (Strong Buy) .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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