Severstal Announces Closing of the Transaction with Afferro Mining
12/25/2012 - OAO Severstal announced that the transaction between its indirect subsidiary Lybica Holding B.V. and Mano River Iron Ore Holdings Limited, a wholly owned subsidiary of Afferro Mining Inc., on purchasing a 38.5% minority interest in Severstal Liberia Iron Ore has been closed.
OAO Severstal announced that the transaction between its indirect subsidiary Lybica Holding B.V. and Mano River Iron Ore Holdings Limited, a wholly owned subsidiary of Afferro Mining Inc., on purchasing a 38.5% minority interest in Severstal Liberia Iron Ore has been closed. Lybica has paid the remaining US$50 million to Mano in accordance with the amended agreement, which was announced on December 14. Thus, the company now holds a 100% interest in the Putu Iron Ore project in Liberia and has no further obligations under the agreement towards Afferro.
Vadim Larin, CEO of the Severstal’s Resources division, commented, “We are pleased to announce the closing of this transaction which will strengthen Severstal’s position in the global iron ore market. Further development of the Putu project supports the Severstal’s strategic goals and will continue to be conducted in line with the strictest corporate governance and corporate social responsibility standards. We would also like to express our gratitude to Afferro Mining for a successful partnership between our companies during the last four years”.
The Putu iron ore project is a 13km long iron rich ridge, located only 130km inland from the shoreline of Eastern Liberia. In February 2011 an independent mineral resource report estimated 2.4 billion tonnes of iron ore, in June 2011 the resource estimate was increased to 3.2 billion tonnes, and in October 2012 it was increased up to 4.4 billion tonnes within the optimized pit shell, with an average 34% iron grade. A Mineral Development Agreement detailing the fiscal and legal terms for the development and mining of the Putu iron ore deposit was granted and ratified by the Government of Liberia on 9th September 9 2010. The Agreement term is for a period of 25 years and this can be extended further in line with the life of the mine. Severstal held a 61.5% interest in the project from 2008 until April , 2012, when the company - through its subsidiary Lybica Holdings B.V. – announced the acquisition of the remaining 38.5% interest from its partner, Afferro Mining Inc.
