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FOR
IMMEDIATE RELEASE
EVRAZ GROUP S.A. TO PURCHASE 73% OF STRATEGIC MINERALS
DANBURY, Connecticut, April 10, 2006 —
Evraz Group S.A., a major Russian mining company and steel producer based in Luxembourg, is purchasing a 73% interest in Strategic Minerals Corporation, a leading producer of vanadium products headquartered in Danbury, Connecticut. The approximately U.S. $110-million purchase is effective on May 1, 2006. The closing is subject to customary conditions and approvals.
The sellers are metals executives who bought the vanadium business from Union Carbide in 1986 as a leveraged buy-out, forming Strategic Minerals Corporation and managing the new company until retirement. Most of the remaining shares in Strategic Minerals are owned by Sojitz Corporation of Tokyo, Japan, who will retain the holding after the transaction closes.
Evraz is a major vertically-integrated mining and steel producer that produced 13.9 million tons of raw steel in 2005, mainly in Russian mills. Since Evraz mines iron ore that contains vanadium, the company's steelmaking operations yield a vanadium-bearing slag. Evraz plans to use the vanadium in this slag in downstream products, increasing the value of its vanadium raw materials. Evraz believes that Strategic Minerals has both the technical and marketing expertise to helpm them accomplish this objective, the company said.
"The transaction will compensate for the absence of Evraz's own vanadium processing facilities and will ensure strategic exposure of the Company to attractive markets of high value-added vanadium products," said Valery Khoroshkovsky, Chief Executive Officer of the Evraz Group. "Evraz will also benefit from Stratcor's advanced technical know-how and outstanding marketing expertise."
The transaction is also expected to strengthen and expand Strategic Minerals' worldwide position in vanadium oxides and alloys through the exploitation of Evraz's vanadium-bearing raw materials.
"Evraz has the resources that will enable our company to grow and improve our operations," said William G. Beattie, Chariman of Strategic Minerals Corporation. "We anticipate significant synergies in the consolidation of the two companies that will allow us to better serve our customers long-term."
Mr. Beattie noted that the current management team under President Hein Enslin will continue to operate the vanadium business after Evraz purchases the business. Strategic Minerals Corporation produces a complete line of vanadium alloys and chemicals used by the steel, titanium, and chemical industries. Its plants are located in Hot Springs, Arkansas and Brits, South Africa while its sales staff is located in Pittsburgh, Pennsylvania.
April 10, 2006
For more information, contact
John Crane
telephone: (212)302-3344
email: John.Crane@stratcor.com
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