Support The Moscow Times!

Magnitogorsk Studies Belon Asset Sale

Magnitogorsk Iron & Steel said Tuesday that it might sell the steam-coal assets of unit Belon and retain the subsidiary’s production of coal used to make steel.

Output of coal for power stations is “noncore” for Belon, Magnitogorsk, owned by billionaire Viktor Rashnikov, said by e-mail. The parent company is studying several options to sell the assets, including to SDS-Coal, Russia’s third-largest producer of steam coal, it said.

SDS-Coal asked for antitrust approval to buy the Listvyazhnaya mine and washing plant from Belon, Russia’s Anti-Monopoly Service said on its web site Monday.

Magnitogorsk bought 83 percent of Belon in October 2009, seeking self-sufficiency in coal used for steelmaking as it expands production. The steelmaker plans to invest $1.2 billion to $1.5 billion a year from 2011 through 2014 to expand steel-product output by 60 percent and increase self-sufficiency in coal, Rashnikov told Kommersant in an interview in October.

“Magnitogorsk may garner at least $200 million to $300 million from this sale,” said Sergei Donskoi, an analyst at Troika Dialog. The Listvyazhnaya complex may generate as much as $50 million of earnings before interest, taxes, depreciation and amortization, he wrote in a note Tuesday.

Read more

Independent journalism isn’t dead. You can help keep it alive.

The Moscow Times’ team of journalists has been first with the big stories on the coronavirus crisis in Russia since day one. Our exclusives and on-the-ground reporting are being read and shared by many high-profile journalists.

We wouldn’t be able to produce this crucial journalism without the support of our loyal readers. Please consider making a donation to The Moscow Times to help us continue covering this historic time in the world’s largest country.