Metalloinvest Cuts Output on Payment Arrears

NOVOTROITSK, Orenburg Region — Metalloinvest, the country's largest iron ore miner, has slashed output of the steelmaking raw material as clients have fallen more than $350 million into payment arrears, its chief executive said Thursday.

Metalloinvest, half-owned by billionaire Alisher Usmanov, has managed to retain steel output levels throughout the world financial crisis and expects substantially higher core earnings this year than in 2007, Maxim Gubiyev said.

But the company is running iron ore production in November and December at 65 percent below peaks reached earlier this year, Gubiyev said at Metalloinvest's Ural Steel plant.

Metalloinvest was owed 15.4 billion rubles ($561.2 million) by its clients, of which 10 billion rubles was already late, he said.

"We understand the situation, since we have been working with our clients for many years, and we will continue working with our partners when the crisis is over," Gubiyev said.

Metalloinvest, through its Mikhailovsky subsidiary, would also pursue its plan to enter the copper market by developing the enormous Udokan deposit in eastern Siberia, for which it won a license in September.

Gubiyev said the company had so far paid 4.5 billion rubles of the 15 billion rubles needed to acquire the Udokan license.