MMK Sinks $2Bln Into Auto, Building

Magnitogorsk Iron & Steel Works, or MMK, the country's third-biggest steelmaker, plans to invest $2 billion to boost production for the construction and automotive industries, chairman Viktor Rashnikov said Friday.

The steelmaker signed contracts with four companies, Rashnikov said in Magnitogorsk. The plant will supply Germany's SMS Demag and SMS Mevac, Fata Hunter, a unit of Italy's Finmeccanica, and Ukraine's Novokramatorsky Machine-Building Plant.

Magnitogorsk, which owns the country's largest stand-alone steel plant, will spend $1 billion on building a mill for producing an annual 2 million tons of automobile body sheet, Rashnikov said. The new facility, which should be opened in 2010, will boost the company's output from 12.5 million yons of steel last year to 16 million tons by 2012, he said.

"Russia's metals industry is entering a new phase," Industry and Energy Minister Viktor Khristenko told reporters in Magnitogorsk. "We are adopting new technologies and boosting productivity".

Russia is one of Europe's fastest growing car markets as international automakers, such as General Motors, Ford and Toyota either set up or expand production facilities in the country. Sales of foreign cars, including those made in the country, surged 70 percent to 720,143 in the first half of this year.

The new mill will also supply hard-drawn semi-finished rolled products for the Magnitogorsk-Atakas mill in Turkey. Magnitogorsk said in May that it planned a $1.1 billion mill in southern Turkey to produce 2.6 million tons of hot- and cold-rolled steel.

The company will also reconstruct within the next three years its hot-roll mill to produce 5 million tons of rolled and sheet steel a year for shipbuilding, boiler and bridge building on expectations of growing domestic demand.

Source: The Moscow Times, Monday, July 16 — 2007