AK Steel Acquires Iron Ore, Metallurgical Coal Interests
AK Steel owns 49.9% of the new joint venture, named Magnetation LLC, which currently produces about 400,000 metric tons of iron-ore concentrate annually from a plant near Keewatin, Minn. The joint venture is constructing a second plant near the existing operation with a targeted annual capacity of approximately 1 million metric tons. The joint venture expects to expand to a rate of about 3.5 million metric tons annually by 2016 with a total of four concentrate plants. AK Steel will contribute a total of $297.5 million for its interest in the joint venture, funded over several years.
In addition, AK Steel will pay $36 million in cash for the coal company, which the company plans to rename AK Coal Resources. AK Steel expects to invest approximately $60 million in AK Coal Resources to develop its mining operations and begin coal production.