The Ukrainian mining and steel producing company Metinvest Holding (Metinvest) has announced its acquisition of a 100 percent stake in United Coal Company (UCC), an American producer of metallurgical and steam coal headquartered in Teays Valley, West Virginia. The acquisition has received all necessary approvals in the United States and Europe.
The UCC acquisition will allow Metinvest's coke and chemical facilities to produce a better quality feedstock. As a result, the company's steel works will be provided with a higher quality coke, reducing iron production costs and improving quality characteristics. Thus, Metinvest will be more competitive in current and prospective sales markets, the company's release states.
"We have always been interested in raising the effectiveness of our business and improving the quality of our production," Metinvest director general Igor Syry stated. "The quality level of coke is especially important to us today, as the company has stopped using natural gas in pig iron production, due to price rises for gas," he added.
Metinvest has capacities of 10.8 million mt of crude steel per year, more than 11 million mt per year of rolled stock and semi-finished steel, over 5 million mt per year of metallurgical coke and over 40 million mt per year of iron ore - enough to meet the company's internal demand in steelmaking raw materials and to be a key supplier to major steelmaking companies in Europe. Metinvest comprises 23 industrial companies in mining and steel, many of which are located in Ukraine. In Western Europe Metinvest recently acquired Ferriera Valsider and Trametal, Italian re-rolling companies, and British carbon steel plate producer Spartan UK.
"Having assets in the United States, the world's most stable supplier, and having access to the world class mining methods employed by UCC with its tremendous record of and dedication to safety is a transformational step for Metinvest. This transaction positions us well for the rebound of the world markets," Mr. Syry stated.
The value of the deal was not disclosed. However, in a note to investors, Kiev-based investment bank Dragon Capital estimated that Metinvest paid between $800 million and $1 billion for UCC, which accounts for four percent of coking coal output in the US.