13 Sep 2017 14:38

FAS approves Severstal purchase of Yakovlevsky mine owner

MOSCOW. Sept 13 (Interfax) - Russia's Federal Antimonopoly Service (FAS) has approved Severstal's request to purchase 100% of LLC Metall-Group, which holds the license to mine the central section of the Yakovlevsky iron ore deposit in Belgorod Region, the agency said.

Severstal closed a deal in July to acquire the rights from Gazprombank to claims on loans and accrued interest totalling more than 12 billion rubles against LLC Metall-Group, as well as security on these loans. The deal cost 6 billion rubles.

The co-owners of Metall-Group in August filed a suit an arbitration court seeking to invalidate the election of the company's new board of directors. The plaintiffs are LLC Evrometall-Group and LLC Sfera which, according to SPARK-Interfax, own 51% and 24.9% if the company respectively. The court refused to grant injunctions.

Metall-Group's other shareholders, according to SPARK-Interfax, are the Cyprus-registered Dourlin Commercial Limited with 24% and LLC Stroy-Profit with 0.1%. One of the main beneficiaries of the company that owns the Yakovlevsky mine is Vitaly Chernomyrdin, son of the former Russian prime minister, Viktor Chernomyrdin.

Severstal plans to become the sole owner of the Yakovlevsky mine, the proved reserves of which are 9.6 billion tonnes of iron ore, company materials state.

The Yakovlevsky mine is located in the village of Yakovlevo, in the Kursk Magnetic Anomaly in Belgorod Region. The operational scheme includes underground mining and surface crushing without beneficiation (DSO). The ore has an iron content of 61.4%. Severstal received 217,000 tonnes of iron ore from the mine in 2016.

The mine's current production capacity is 1 million tonnes and a project to increase capacity to 4.5 million tonnes was earlier launched at the asset.

Severstal is a vertically integrated steel company which has assets in Russia, Europe, Africa and Ukraine. The majority shareholder of the company is Alexei Mordashov, who owns 79.2%. The remaining shares are in free float.