MMK inks MoU with the Czech firm to secure iron ore needs

July 17, 2008

July 17th (Steel Guru) – It is reported that MMK has signed a strategic partnership memorandum with the Czech Company ALTA for the Prioskolsky Mining and Processing Plant Project

Mr Victor Rashnikov chairman of OJSC MMK Board of Directors and Mr Vladimir Plašil chairman of the Board of Directors of ALTA signed the Memorandum on Strategic Partnership aimed at organizing mutually advantageous cooperation and coordination of the parties’ actions for the implementation of the Prioskolsky Mining and Processing Plant in the Belgorod Region of the Russian Federation.

According to the Memorandum, ALTA will be the general contractor for the construction of the Prioskolsky GOK and will propose a scheme for the project’s financing. ALTA already has positive experience in the implementation of similar projects in the mining and other industries with the use of long-term financing on preferential conditions.

Alongside the Memorandum, a EUR 200 million framework contract was signed for ALTA’s delivery of process equipment and services for preparatory work and stripping at the Prioskolsky Iron Ore Deposit.

Mr Rashnikov said that “The selection of a strategic partner for the construction of the Prioskolsky GOK is another step in the consistent implementation of OJSC MMK’s strategy aimed at expanding our Company’s own raw materials supply base.”

When completed, the Belgorod Region project will allow MMK to cover its needs for iron ore materials for a period of over 60 years. It is expected that the construction of the plant’s infrastructure will start as soon as 2009, with the first ore expected to be mined in 2012. In 2016 the plant is scheduled to reach its design capacity of 25 million tonnes of iron ore, which, coupled with output from the local Magnitogorsk mine, will meet 80% of MMK’s requirement for this kind of raw materials.

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