Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Severstal Buys 22% of Celtic Resources

Itar-TassA view of the of Sayanskkhimplast plant at Sayansk, the town in the Irkutsk region, after a chemical explosion killed four people Tuesday. An Emergency Ministry spokesman said no cause for the blast had yet been determined.
Miner and steelmaker Severstal on Tuesday announced the purchase of a 22 percent stake in mining firm Celtic Resources, giving it access to gold assets in Kazakhstan.

Severstal said it had paid cash to buy about 12.3 million shares in London-listed Celtic, which owns gold and molybdenum mines in Kazakhstan and a share in a Russian copper and gold project, from Aton International.

It did not disclose the price of the purchase, made through a subsidiary, Bluecone Limited.

"Severstal Resurs believes the purchase of a 22 percent stake in Celtic, with its attractive mining assets in Russia and Kazakhstan, to be an excellent investment," said Roman Deniskin, chief executive of Severstal Resurs, which manages all of Severstal's mining operations.

Celtic managing director Kevin Foo said he hoped Severstal would help the company operate in the sometimes-difficult Russian market.

"We're delighted. Severstal is a huge company and highly respected internationally. We think they will be an active and productive shareholder; they will give us advice on how to operate in Russia, which is very welcome," he said. "We'll sit down with them and work out how to develop the relationship."

On whether this could be a prelude to a takeover, he said: "Severstal are big enough to take over a company larger than us, but no -- we see this as a strategic investment to test the market in this area."

Severstal Resurs is the country's second-largest producer of iron ore pellets and coking coal, both of which are used in making steel.

It operates four mining complexes in northwest Russia and western Siberia. Its mining division produced 2.2 million tons of coking coal and 9.5 million tons of iron ore pellets in 2006.

The company, the country's largest steelmaker including its foreign assets in Italy and the United States, is majority owned by billionaire Alexei Mordashov.