Azerbaijan, Baku, Feb. 22 / Trend E. Kosolapova/
Kazakh metallurgical company Eurasian Natural Resources Corporation (ENRC) agreed to supply at least 8 million tons of iron ore with a 15-percent discount to Russian Magnitogorsk Iron and Steel Works Plant (MMK) in 2012, ENRC reported on Wednesday.
"The revised contract is in line with regional CIS pricing, which is currently at approximately a 15 percent discount to world FOB prices based on Platts system," the company said.
ENRC is a major supplier of iron ore to Magnitogorsk Plant. The contract on supplies was signed by the sides in 2007.
Meanwhile, prices for iron ore fell down significantly in the second half of 2012 and Magnitogorsk Plant began to buy raw materials from alternative suppliers, which offered lower prices. Moreover, Magnitogorsk Plant proposed ENRC to change contract terms taking into account the market situation. Kazakh company did not agree and appealed to the court. Later, however, ENRC withdrew its claim and the parties started negotiations, as a result of which an agreement was reached.
"We have a close and supportive relationship with MMK and this is reflected in the revised iron ore supply agreement, in light of the current period of market volatility and economic uncertainty," ENRC quoted company's Chief Executive Officer Felix J. Vulis, as saying.
Magnitogorsk Metallurgical Plant is one of the largest steel producers in the world and is a leading ferrous metallurgy enterprise in Russia.
Eurasian Natural Resources Corporation (ENRC) is one of the leading diversified natural resources groups with integrated mining, processing, energy, logistical and marketing operations. ENRC production assets are mainly located in Kazakhstan. Moreover, the company operates in China, Russia, Brazil and Africa (the Democratic Republic of Congo, Zambia, Mozambique and South Africa). ENRC is the world's largest producer of ferrochrome on a chrome content basis and one of the world's significant iron ore and alumina producers.