NEW YORK Magnetation LLC,
AK Steel Corp.s joint venture with iron ore concentrate
producer Magnetation Inc., has completed a $325-million notes
offering and has entered into a $50-million senior secured
credit facility, AK Steel said May 20.
The proceeds from the senior
secured notes offering will be used primarily to fund the
construction of a new iron ore pellet plant in Reynolds, Ind.,
the steelmaker said. Production from the pellet plant will
supply AK Steels blast furnaces in Ohio and Kentucky, the
Construction of the pellet plant
is under way and should be completed in about 18 months, with
initial pellet production anticipated during the fourth quarter
of 2014, AK Steel said.
When fully operational, the
Magnetation LLC plant will produce about 3 million tons of iron
ore pellets annually.
AK Steels strategic
investment in Magnetation LLC is intended to provide the
company with about 50 percent of its annual iron ore
requirements beginning in 2015.
"We are excited to reach another
milestone event in AK Steels strategic initiative to
become more self-sufficient in steelmaking raw materials," AK
Steel chairman, president and chief executive officer James
"This transaction positions
Magnetation well to continue on its path of accelerated
construction of the pellet plant," he added.
West Chester, Ohio-based AK
Steel, which owns 49.9 percent of the joint venture, also said
May 20 that it has contributed an additional $50 million to
Magnetation LLC. So far, the steelmaker has invested about $200
million in Magnetation LLC of a planned total of nearly $300
AK Steel said it plans to contribute the remaining $100
million during 2014 to support the construction of the new
A version of this article
was first published by AMM sister publication Steel