Bloomberg quoted Eurasian Natural Resources Corp said OAO Magnitogorsk Iron and Steel Works has breached a contract to purchase 1 million tonnes of its iron ore a month and it will seek compensation from the Russian company.

ENRC a London based miner of the commodity in Kazakhstan said in as statement that Magnitogorsk has indicated it will buy a maximum of 700,000 tonnes of ore a month in the fourth quarter.

It said “We expect to be compensated by Magnitogorsk via an arbitration process for any negative economic effect as a result of the breach of contract. We reserve our legal rights in this regard.”

Mr Kirill Golubkov a spokesman for Magnitogorsk wasn’t immediately able to comment when contacted.

The steelmaker said in its annual report ENRC supplied all of Magnitogorsk iron ore pellets last year after the two signed a 10 year agreement in 2007. Magnitogorsk would buy iron ore concentrate and pellets at a price linked to the world market.

(Sourced from Bloomberg)