Russia's sanctioned Severstal steelmaker signs contract for equipment supply with China
Russia's Severstal, a steel and mining company subject to Western sanctions, has signed a contract with China to procure equipment for the construction of a new iron ore pellet plant.
Source: The Moscow Times, citing the company's statement
Details: Russia has not specified with whom the contracts were signed, merely mentioning "Chinese partners".
The report says Severstal plans to build a 10 million tonne per annum iron ore pellet production facility at the Cherepovets plant in 2026, worth about RUB 97 billion (roughly US$1.05 billion).
The company plans to supply the critical process equipment from China.
The first equipment deliveries are planned for the fourth quarter of 2024. Construction of the new shop will commence in January 2024.
Background: Severstal is subject to various sanctions imposed by multiple countries.
In particular, Alexei Mordashov, Chairman of the Board of Directors and owner of 77% of shares in Joint-Stock Company Severstal Management, the parent company of Severstal, is subject to US and EU sanctions.
Companies associated with Mordashov, including Severstal, were simultaneously sanctioned.
Moreover, Severstal has been sanctioned by the UK, Australia, New Zealand, Canada and Ukraine.
In April 2022, Poland seized Severstal's property, totalling PLN 140 million (roughly US$33 million).
On 23 March 2022, after sanctions were imposed, the company failed to pay a US$12.6 million coupon on its Eurobonds. Severstal became the first Russian company to suffer a technical default on Eurobonds.
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