OAO Severstal has announced plans to acquire the business of PBS Coals, a miner and processor of metallurgical and thermal coal. PBS has six underground and six surface coal mines in Somerset County, Pa. Severstal will acquire PBS for $1.3 billion to help supply its U.S. operations with coking coal. PBS has the capacity to produce over 4 million metric tons of metallurgical coal annually and has 133.5 million metric tons of in-place coal reserves.

Through its acquisition of PBS, Severstal expects to achieve benefits from the vertical integration of its upstream operations and to increase its self-sufficiency with regard to primary raw materials supply for its North American operations. Severstal acquired Wheeling-Pittsburgh parent company Esmark Inc. earlier this month (four plants in Ohio, West Virginia and Pennsylvania) and has purchased plants in Baltimore, Md., and Warren, Ohio.