The shares were bought from Maxi Group and company management, a source at Urals Steel said.
"Due to high prices and freight tariffs for scrap, right now it is fundamentally important to tackle the problem with scrap procurement in regions that are close to core production facilities. That is why this asset was chosen. For example, if a metric ton of ferrous role now costs 5,000 rubles, the rail freight tariff from the Tyumen region is 1,000 rubles," Dadyka said.
Vtorchermet will supply scrap to Urals Steel's electric steelmaking facility, the modernization of which will increase the company's annual scrap needs to 1.2 million-1.3 million metric tons from the current 1 million metric tons.
"Vtorchermet has 19 scrap yards and accounts for about half the scrap metal collected in the Orenburg region. "Combined with Urals Steel's existing assets in this sector, with this acquisition we have concentrated in our hands 100 percent of this sector in the Orenburg region," Dadyka said.
Urals Steel is actively working on further acquisitions of such companies in neighboring regions, he said.
About 400,000-450,000 metric tons of scrap metal are collected in the Orenburg region a year. Vtorchermet plans to ship 200,000 metric tons of ferrous scrap this year, compared to 90,000 metric tons in 2005, and aims to increase this figure to the technical maximum of 300,000 metric tons in two years. Interfax