Mittal Steel Bids For Ukraine Iron Plant KGOKOR

KIEV, Ukraine -- Mittal Steel, the world's largest steel producer, has submitted an $800 million bid to Ukraine's government to complete construction of the Soviet-era KGOKOR iron ore plant, the company said on Wednesday.

Lakshmi Mittal, owner of Mittal Steel

Mittal, which became the biggest foreign investor in Ukraine by acquiring the Kryvorizhstal steel works last year, said it would be able to produce 10.5 million tonnes a year of iron pellets at KGOKOR.

It would be able to start production in a year at an initial rate of 7 million tonnes a year, the company said, without specifying when it would reach full capacity.

Ukraine said last month it wanted to set up a joint venture with a powerful investor to complete KGOKOR, whichofficials said at the time could cost at least $400 million.

The country's top producer of iron pellets, Ferrexpo Poltava Mining, said last month it was interested in the project.

KGOKOR has also attracted a joint proposal from Russia's Metalloinvest, a group managing some of the assets of businessmen Alisher Usmanov and Vasily Anisimov, and Ukraine's Smart Group, controlled by Vadim Novinsky.

Construction of KGOKOR was begun by the Soviet Union in 1983. After the collapse of the USSR, Ukraine received a 56.4 percent stake, Romania 28 percent and Slovakia 15.6 percent.

"Mittal Steel is ready to organise cooperation with the governments of Slovakia and Romania," the company said.

KGOKOR is located 70 kilometres from Kryvorizhstal, Ukraine's largest steel plant, which Mittal acquired in October.

Ukrainian officials have said KGOKOR could initially produce 6.6 million tonnes a year of iron ore pellets, rising later to 10 million.

Source: Reuters