Reuters reported that Magnitogorsk Iron and Steel Works bought control of Siberian coal miner Belon doubling its stake to 82.6% to secure stable raw material supplies for Russia's largest steel mill.

MMK said in a statement that supplies from Belon mines would provide the bulk of its coking full needs, ending the company isolation as the only Russian steel major without control of its own coal resources. It did not disclose the purchase price.

Mr Viktor Rashnikov the steel company majority owner and chairman, billionaire said in the statement that "This transaction brings MMK's self-sufficiency in strategically important input materials to a new level."

Unlike its peers, MMK was required until now to buy its coking coal on the open market an advantage when raw material prices are low, but increasingly costly when they rise.

MMK has gradually built up its stake in Belon after first entering the Novosibirsk based miner as a minority shareholder. It already owned 41.3% of Belon before buying out its partner, Belon General Director Mr Andrei Dobrov. Reuter data shows an 82.6% stake in Belon would be worth USD 682 million at current prices. MMK would therefore have paid half of this amount USD 341 million to double its stake if it paid market price.

(Sourced from Reuters)