Russian company eyeing US coal complex

RUSSIAN steel producer Severstal has bid for the acquisition of coal mining assets in the United States – though the name of the complex’s current owner remains under wraps.

Donna Schmidt

According to Reuters, the steelmaker noted in a prospectus for a loan participation notes program late last week that it is considering the transaction as part of its goal to secure long-term coal supplies in the US. It did not release the name of the mine or its owner.

Severstal has previously taken over several underperforming US assets, including the former Rouge Steel facility, the Sparrows Point mill in Maryland and the SeverCorr mill in Mississippi.

Russian outfits now own 10% of America’s steelmaking capacity, Reuters reported.

In its documentation, Severstal also said it "may decide to submit a bid for one or more (US) coal mining assets in the near term, possibly as early as June or July 2008" to add to its coking coal assets already held in Russia.

In the meantime, Reuters reported the company plans to invest $16.3 billion in capital expenditures between 2008 and 2012.

“The group's acquisition strategy is primarily focused on the CIS and the United States, although as the United States market is relatively mature and consolidated, opportunities in that market are not expected to arise frequently," Severstal said.