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"Wheeling-Pitt, Severstal Plan Coke-making Joint Venture"
"WHEELING, W.Va. -- Wheeling-Pittsburgh Steel Corp. and Severstal North America Inc. are planning to create a joint venture involving Wheeling-Pittsburgh's Coke Plant in Follansbee, W.Va. The two companies have signed a non-binding letter of intent for the project and a definitive agreement is expected on or before March 31, 2005.Under the agreement, Wheeling- Pittsburgh Steel will contribute the assets of its Follansbee Coke Plant to the joint venture and Severstal will contribute most of the capital to rebuild the facility over the next four years, officials said. Severstal is expected to commit $140 million to the joint venture over four years, which will be used for such coke plant capital improvements. In addition, Severstal would make a $20 million payment directly to Wheeling-Pittsburgh at the closing of the joint venture.The proposed agreement, after all capital contributions are received from Severstal, would provide Severstal with a 50% ownership of the joint venture. At that time each party would take 50% of the coke produced by the joint venture.The Follansbee Coke Plant is located on the Ohio River and consists of one six-meter battery and three three-meter batteries. Total cokemaking capacity is expected to be in excess of one million tons per year after completion of the capital improvements. The letter of intent also provides for a management agreement to be entered into at the closing of the joint venture, pursuant to which Wheeling-Pittsburgh Steel would continue to operate the facility for the joint venture. The joint venture will produce coke for the benefit of Wheeling-Pittsburgh Steel and Severstal. "This agreement is good for Wheeling-Pittsburgh Steel, the State of West Virginia and the domestic steel industry," said James G. Bradley, chairman, president and chief executive of Wheeling-Pittsburgh Steel. "It would ensure a significant investment in West Virginia and in domestic cokemaking."The coke market has been highly volatile," Bradley continued. "This transaction minimizes our risk while assuring an adequate coke supply for our remaining blast furnace and freeing up capital for potential future value-added downstream investments."Severstal North America is an integrated flat rolled sheet steel producer that primarily serves the automotive, converter and service center markets in North America. Its manufacturing facilities and corporate offices are located in Dearborn, Mich., with approximately 2,200 employees. Severstal is a wholly owned subsidiary of OAO Severstal, the second largest steel producer in Russia.Wheeling-Pittsburgh Steel Corp. is a metal products company with approximately 3,100 employees. In addition to Follansbee, the company has facilities in Steubenville, Mingo Junction, Yorkville and Martins Ferry, Ohio; Beech Bottom, W.Va., and Allenport, Pa.Visit Wheeling-Pittsburgh Steel Corp.: www.wpsc.com"