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Mechel seeks investors for ferrosilicon plant

Keywords: Tags  Mechel, Bratsk Ferroalloys Plant, Sberbank, Metal Bulletin, ferrosilicon


LONDON — Russian coking coal and steel producer Mechel OAO is seeking investors for its ferroalloys plant in Bratsk and considering options that could include a 100-percent sale of the asset, AMM sister publication Metal Bulletin has learned.

Russia-based Sberbank CIB is acting as exclusive financial adviser to Mechel and will accept nonbinding offers for investment in the ferrosilicon plant until May 3, according to a presentation obtained by Metal Bulletin.

After submitting nonbinding bids, interested parties will be invited to the next stage of the process, which will include site visits, management meetings and a confirmatory due-diligence phase.

Mechel announced in September that it was divesting several noncore assets, including the Tikhvin Ferroalloy Plant in Russia and the Voskhod chrome mine in Kazakhstan ( amm.com, Sept. 28). Bids for the company’s chrome assets are due this month.
Bratsk was not named among the assets announced in September.

The plant produced 69,000 tonnes of 65-percent ferrosilicon and 16,000 tonnes of 75-percent ferrosilicon in 2012 at 94-percent capacity utilization, according to the presentation.

Domestic sales account for 15 percent of total sales, while the rest is exported to other countries, including Japan and South Korea.
The plant is located in the Irkutsk region of southwest Siberia.

Sberbank has described the asset as having the potential to create a major ferroalloys hub in the region and offering the shortest export route to fast-growing Asian markets.

The bank said it expects a strong rebound in ferrosilicon prices in 2013 as a result of increased steel consumption and following a significant drop in 2012.

Neither Mechel nor Sberbank responded to requests for comment.

A version of this article was first published by AMM sister publication Metal Bulletin.


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