Eurasian Resources Group And MMK Sign A Landmark Iron Ore Agreement
Eurasian Resources Group (ERG), a leading diversified natural resources producer, and OJSC Magnitogorsk Iron and Steel Works (OJSC MMK) have concluded a strategic agreement on the delivery of iron ore from JSC Sokolov-Sarbai Mining Production Association (JSC SSGPO), owned by ERG. The companies have agreed that more than 30Mt of iron ore products, including pellets and concentrate, will be supplied until the end of 2020. This contract is the largest in the Russian market of steel-related raw materials.
The agreement will ensure a steady and secure supply of iron ore to meet the needs of OJSC MMK, Russia’s largest steel producer, for the next four years. It will also provide guaranteed sales to products manufactured by JSC SSGPO (up to 80% of the total sales volumes), which is one of the key iron ore producers and exporters in the Eurasian region.
For Eurasian Resources Group, the agreement marks a new step in the implementation of its sustainable development strategy, aimed at improving the performance of individual entities. It will generate long-term demand for iron ore products and enable to set more ambitious sales targets for JSC SSGPO.
The new agreement builds on a longstanding partnership between the two companies and was signed by Mr Pavel Shilyaev, CEO of OJSC MMK, and Mr Yury Sentsov, Chief Sales Officer and CEO of ERG Sales, in attendance of Mr Victor Rashnikov, Chairman of the Board of Directors of OJSC MMK, and Mr Alexander Machkevitch, Chairman of the Board of Directors of ERG.
Viktor Rashnikov said: “MMK continues to develop its partnership with ERG, which is one of the biggest suppliers of high quality iron ore. Our relationship is based on long-term and mutually beneficial cooperation. This long-term agreement with ERG is at core of our corporate development programme, which aims to secure OJSC MMK’s supply of raw materials.”
Alexander Machkevitch said: “The long-term agreement with MMK reinforces our reputation as a reliable partner and a customer-oriented business. The contract is also key to securing the long-term sustainable growth of JSC SSGPO which is a major enterprise not only for the Kostanay Region but for Kazakhstan as a whole. We very much look forward to a successful partnership with MMK over the coming years.”
Remind, that the driver of the shake-up is the Kazakh government, which was deeply embarrassed by the storm of negative publicity around ENRC and now holds a 40 per cent stake in ERG, with Bakhyt Sultanov, finance minister, sitting on the board.