Severstal completes transaction to consolidate 100% ownership of Severstal Liberia Iron Ore Ltd.

OAO Severstal, one of the world’s leading vertically integrated steel and steel related mining companies, today announces it has completed the transaction to acquire the remaining 38.5% minority interest in Severstal Liberia Iron Ore Ltd. (“SLIO”) – a British Virgin Islands registered entity, from its partner, Afferro Mining Inc. (“Afferro”).

As per the sale and purchase agreement (“SPA”), Severstal has, through its subsidiary Lybica Holdings B.V., made an initial cash payment of US$65 million. Of this, US$55.25 million has been paid to Mano River Iron Ore Holdings Limited, Afferro’s wholly owned subsidiary, and the remaining US$9.75 million is to be held in escrow with a third party. Thus, Severstal has met all its obligations in respect of the initial payment.

The initial terms of the deferred cash payment under the SPA remain unchanged.