WEST CHESTER, Ohio
May 20, 2013
/PRNewswire/ -- AK Steel (NYSE: AKS) said today that Magnetation LLC ("Magnetation"), its joint venture with Magnetation, Inc., has successfully completed a
senior secured note offering and has entered into a
senior secured credit facility. The proceeds from the note offering will be used primarily to fund construction of a new plant in
to produce high-quality iron ore pellets, a critical steelmaking raw material. Production from the pellet plant will supply AK Steel's blast furnaces located in
"We are excited to reach another milestone event in AK Steel's strategic initiative to become more self-sufficient in steelmaking raw materials," said
James L. Wainscott
, Chairman, President and CEO of AK Steel. "This transaction positions Magnetation well to continue on its path of accelerated construction of the pellet plant."
AK Steel's strategic investment in Magnetation will provide the company with about 50 percent of its annual iron ore requirements beginning in 2015. By becoming more vertically integrated, AK Steel will gain greater control over its cost structure, enhance its raw materials self-sufficiency, and benefit by significantly reducing its exposure to the volatile global market for this critical steelmaking input.
In conjunction with the completion of the Magnetation financings, AK Steel said that it has contributed
to Magnetation as part of AK Steel's planned remaining
investment in the joint venture. Thus far, AK Steel has invested approximately
in Magnetation of a planned total of nearly
. AK Steel plans to contribute the remaining
during 2014 as needed to support the construction of the new pellet plant.
Construction of the pellet plant is underway and should be completed in about 18 months. Initial pellet production is anticipated during the fourth quarter of 2014. When fully operational, the Magnetation plant will produce about three million tons of iron ore pellets annually.