ArcelorMittal is eyeing an iron ore deposit on Baffin Island in the Arctic with an agreed C$433m (US$432) bid to acquire Baffinland Iron Mines of Toronto, Canada.

The C$3.9bn project could help ArcelorMittal reach its target of 100 million tons a year if it is awarded the contract, reports the Financial Times.

Baffinland rejected a C$274m bid in September from Energy and Minerals Group (EMG).

ArcelorMittal made a cash offer of C$1.10 a share, 37% higher than EMG’s September bid.

The Baffinland’s Mary River deposit is estimated to have 365 million tons of iron ore.

Resource Capital Funds, the biggest shareholder in Baffinland, has agreed to offer its 23% stake to ArcelorMittal.