Severstal to buy PBS Coals for $1.3 billion

[Bravo Zulu]

Severstal to buy PBS Coals for $1.3 billion
Saturday, August 23, 2008
By The Associated Press

SOMERSET -- Russian steelmaking giant OAO Severstal yesterday announced plans to buy Pennsylvania-based PBS Coals Corp. for about $1.3 billion in cash.

One PBS mine, Quecreek, became known worldwide in July 2002 when nine miners bored into a flooded abandoned mine chamber and became trapped underground. The miners, who were working from faulty and outdated maps, were underground for more than three days before being rescued one by one.

Severstal will buy PBS by purchasing a public company, PBS Coals Limited, that will be created when Penfold Capital Acquisition Corp. buys PBS, the steelmaker said. The boards of PBS and Penfold have agreed to support that deal and the resulting takeover by Severstal.

PBS mines processes and sells coal in Somerset County. It operates six underground and six surface mines near Severstal's North American production centers. The mines have the capacity to produce more than 4 million tons of metallurgical coal per year, Severstal said.

The Severstal acquisition is part of growing trend among international steel companies looking to tie up coal and other raw materials.

Many U.S. steelmakers spun off their coal operations after the domestic industry bottomed out in the 1980s and have been slow to buy up coal reserves controlled by companies like PBS.

Luxembourg-based ArcelorMittal, the world's largest steel producer, recently bought a bigger piece of Australia's Macarthur Coal and bought Mid Vol Coal Group, which boasts 85 million tons of reserves and mines producing some 1.5 million tons of coal in West Virginia and Virginia.

http://www.post-gazette.com/pg/08236/906411-28.stm

[madrchsod]

1. we are selling off our assets like a crackwhore....

now the russians control one of our strategic resourses.