International diversified resource company Astra Resources has received a letter of intent for the sale of the assets of Hungarian steel works to Astra Resources.

It is intended that a sale and purchase agreement will be finalized in coming months, with the final acquisition of the steel mill including ownership of an energy supply company on the site, along with an integrated research and development centre where T Steel will be further developed for special high reliability applications.

The energy supply company will provide power to the steel mill and other companies in the area, resulting in a separate profit center.

The current plant infrastructure includes a five stage ASEA SFK ladle furnace and associated technologies suitable for the manufacture of premium grade steels.

Dr Jaydeep Biswas CEO of Astra said that "The steel types to be produced by Hungarian steel works will include the premium grade extra low carbon content stainless steel and premium grade, high category, high purity, high durability, ball bearing steels, amongst others. Major steel buyers have already requested steel off take agreements, with Astra's subsidiary, Astra Mining Hungary, which is also currently conducting high level negotiations concerning the establishment of an integrated product manufacturing hub where the Hungarian steel works would have a financial interest in a number of key green transport infrastructure developments."

He added that "These include railway infrastructure, such as the high speed running gear sub assemblies and the manufacturing of rails, which will be suitable for speeds in excess of 160 kilometers per hour. The rail development projects are aimed at speeding up the movement of freight in the European region, resulting in a decrease of pollution and other environmental problems caused by road freight, and will be able to qualify for major European Union funding support."

The Hungarian steel works have a long history of producing high grade steels and a number of potential users have welcomed the planned re opening of the factory, indicating their intention to purchase close to the full initial output of the plant.