Severstal mines African iron ore stake

OAO Severstal (Severstal), a metals and mining company with assets in Russia and in North America, has announced that its Severstal Resources mining division has acquired a 61.5 per cent stake in African Iron Ore Group (AIOG).

The purchase will be effected through Severstal’s Dutch subsidiary, Lybica Holding BV.

Through its subsidiaries, AIOG owns the exploration rights for an iron ore deposit in the Putu Range area in Liberia, containing more than 500 million tons of iron ore.

Severstal will pay US$37.5 million (£25.1 million) for the stake. Of this, $22.5 million will be used to purchase a 45 per cent stake from Mano River Resources and other shareholders. Some $15 million will be used for the purchase of additional AIOG shares.

Roman Deniskin, Severstal Resources CEO, commented: “The development of the Putu Range iron ore project is a significant step in the dynamic development of our mining business. From this new region we will supply production to the European and North American markets.”

Following Severstal Resources’ majority interest, AIOG will be re-named Severstal Liberia Iron Ore.

Marc Barber

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses. More by Marc Barber