The Russian steel producer Magnitogorsk Iron and Steel Works (MMK) has announced the creation of a strategic alliance with the country's coal producer Belon as a result of its acquisition of a 50 percent stake in Onarbay Enterprises Ltd, which owns an 82.6 percent stake in Belon.
Following the transaction, MMK has increased its indirect ownership in Belon to 41.3 percent for a consideration of $230.4 million.
The acquisition of the additional stake in Belon and the creation of a strategic alliance with this company will allow MMK to secure 55 percent of its requirements of coking coal and 60 percent of its requirements of steam coal by 2012.
In order to ensure long-term security as regards raw materials, MMK plans an investment in Belon with the aim of increasing its annual coal production threefold to 14.4 million metric tons by 2012.