Evrazholding buys Privat's assets

Evraz Group's core shareholder, Lanebrook Limited, has bought five Ukraine-based assets earlier owned by Privat Group (Petrovsky Plant, Bagleikoks, Dneprokoks, Dneprodzerzhinsk Coke Plant and Sukha Balka), as well as 50% shares of Yuzhny GOK for $4 billion.
After buying Petrovsky Plant, Evraz will control one of the largest Ukraine’s channel producers (25-30% in total Ukrainian channel production). With Sukha Balka and Yuzhny GOK, the holding will almost fully satisfy the demand for iron ore using own resources (today the share of in-house iron ore supply makes 80%). Sukha Balka produces 3.2mtpy of sintering ore, 40% of which is exported. Yuzhny GOK produces 9mtpy of concentrate (its shipmets make 3% of total Ukrainian non-integrated market) and 5mtpy of agglomerate (70% of Ukrainian market).
In a long-term outlook this acquisition may significantly change the whole structure of Ukrainian raw material market, according to Metal-Expert. Aggregate capacity of Bagleikoks, Dneprokoks and Dneprodzerzhinsk Coke Plant amounts to 3.5mtpy of coke (coal demand makes 5mtpy). Taking into account worsening of coking coal production in Ukraine, Evraz will get an immense market for selling Russian coals from Yuzhkuzbassugol and Raspadskaya Mining Company (later also from Elginsky and Elegestinsky deposits). Using Russian coals in their charge Ukrainian coke producers will improve the quality of the produce and boost domestic and export coke supplies.
The deal, if considered on a country scale, may have a great influence on those Ukrainian consumers who do not have their own raw material resources. In particular, it concerns IUD and Metinvest that were highly dependant on iron ore supplies from producers earlier owned by Privat Group. As a result, next year the market will face growing diversification of raw material supply (a significant increase of imports) or a number of acquisitions in Ukrainian metallurgy.