MMK, Metalloinvest Sign Long-Term Iron Ore Supply Agreement
09/09/2011 - Magnitogorsk Iron and Steel Works and Metalloinvest have signed a long-term iron ore supply agreement with pricing based on current market indicators and price dynamics on the global iron ore market.
Magnitogorsk Iron and Steel Works (MMK) and Metalloinvest have signed a long-term iron ore supply agreement in which the two companies have agreed on pricing for the raw material based on current market indicators and price dynamics on the global iron ore market.
“This contract underscores our strategy to be a preferred provider of iron ore to Russia’s leading metallurgical companies," said Eduard Potapov, General Director of Metalloinvest Managing Company. “Significantly, this is a long-term agreement. Such agreements are critical to our long-term planning, including with respect to production, sales and investment."
Boris Dubrovsky, MMK CEO said, “This contract is quite important to MMK and will ensure MMK’s raw materials security. The products MMK will buy from Metalloinvest ideally fit our blast furnace technology and hence will eventually improve MMK’s financial performance.”
Under the agreement, Metalloinvest’s Mikhailovsky Mining and Processing Plant will supply iron ore to Magnitogorsk Iron & Steel Works (MMK) for as long as three years.
METALLOINVEST, a recognized leader in Russia’s mining and metallurgical industry, is one of the largest iron ore and HBI producers and suppliers in Europe and CIS. In 2010 the Group was responsible for a 36% share of Russia’s production of iron ore concentrate, 59% of Russia’s production of pellets, and 100% of Russia’s production of HBI and iron-rich pellets. In addition, the company produces approximately 9% of the total volume of production of steel and steel products in Russia.
MMK is among the world's largest steel producers and is one of the leaders of Russia's steel industry. The company's operations in Russia include a large steel producing complex encompassing the entire production chain, from preparation of iron ore to downstream processing of rolled steel. MMK turns out a broad range of steel products with a predominant share of higher value added products. The company’s operations also include the MMK-Atakas project in Turkey with annual capacity of 2.3 million tonnes of flat steel. In 2010 MMK Group produced 11.4 million tonnes of crude steel and 10.4 million tonnes of commercial steel products. The same year, MMK Group reported revenue of USD 7.719 billion, EBITDA of USD 1.606 billion, and profit of USD 232 million.
