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. Last Updated: 07/27/2016

MMK Gets $507M Loan for New Steel Mill

APA worker walking past a row of ovens at the Haverhill North Coke Co. in Ohio. MMK is in talks to build a mill nearby.
Magnitogorsk Iron and Steel Works has secured a 365 million euro ($507.4 million) loan from a consortium of international banks to help finance a new steel mill, the company said Friday.

ABN AMRO, Deutsche Bank and ING Wholesale Banking will supply the 10-year loan, which MMK will spend on a new slab caster and steel plate mill to supply car manufacturers, pipe makers and construction firms. The so-called Mill-5000 is MMK's largest single investment project. The company is investing $1 billion to build the mill, which will supply over 1.5 million tons per year of steel plate from the summer of 2009.

"This is the largest loan from international banks in the company's history," said Viktor Rashnikov, MMK's chairman and majority owner.

"The credit will be used to finance the supply of equipment and services for the project from [German company] SMS Demag and brings us closer to the moment when Mill-5000 will begin production of a unique product in Russia," Rashnikov said.

MMK, the country's third-largest steelmaker, runs the Magnitogorsk steel complex in the Ural Mountains. Founded in 1932, it is Russia's largest single steel plant.

Rashnikov was ranked Russia's 11th-richest man by Forbes magazine in May.

MMK posted a net profit of $866 million in the first half of 2007, up 47 percent on the same period a year earlier, as it sold more steel at higher prices, particularly in the booming Russian market.