OREANDA-NEWS. On 26 March 2008 was announced, that the construction site in Iskenderun, Republic of Turkey, became the venue of a ground-breaking ceremony which marked the start of construction of the Russian-Turkish steel making JV MMK Atakas A. S.

The ceremony was attended by the Deputy Prime Minister of the Republic of Turkey Nazim Ekren, Russia's Ambassador in Turkey Vladimir Ivanovsky, Chairman of the MMK Board of Directors Victor Rashnikov and President of the Atakas Company Recep Atakas.

In his welcome address Mr. Rashnikov noted that this project serves not only to further the strategic plans of MMK and the Company but also to strengthen the Russian-Turkish cooperation and help the development of Turkey’s steel-consuming industries. “The construction of the MMK-Atakas steel plant will be instrumental in satisfying the growing demand of the Turkish machine building, construction and fuel and energy sectors for quality flat products. The fast growth of the country’s market and the Turkish consumers’ interest in the supplies of such material lend us confidence in the success of our project”, said Mr. Rashnikov.

In May of 2007 the Magnitogorsk Iron and Steel Works Open Joint Stock Company (“OJSC MMK”, “MMK”) and the Atakas Company, Turkey, jointly decided to build a new steel plant in Turkey and signed an Agreement on Participation of OJSC MMK in the Authorized Capital of MMK ATAKAS. In July of 2007 MMK became an owner of 50.0000045% of the JV’s shares. The new plant will be occupy two sites, with the main production facilities to be located in Iskenderun, and a second site near Istanbul. The new plant will produce about 2.4 million tons of flat products from steel scrap and metallised raw materials. The purpose of the project is to set up a state-of-the-art industrial complex in Turkey for the production and processing of hot and cold rolled and coated flat products. The complex will have the capacity to produce 2.3 mtpy of hot rolled strip, 750 ktpy of cold rolled strip, 900 ktpy of galvanized coils, and 400 ktpy of colour coated coils. It is planned to set up two steel service centres in Iskenderun and Istanbul. In order to supply the Iskenderun plant with raw and other input materials and to ship finished products from there a seaport will be built directly on site capable of accommodating ships with tonnages up to 80,000 tons.

The plant’s facilities will be commissioned in stages. The first to go on stream will be steel service centres in Iskenderun and Istanbul, to be followed by a continuous pickling line, a cold rolling mill, and combined galvanizing and colour coating lines in both cities. The last to be commissioned will be an EAF plant with a compact strip production (CSP) unit in Iskenderun. During the staged commissioning all the sites will be supplied from OJSC MMK or the international market. The USD 1.7 bn project, with a pay-back period of 6 years, is expected to take three years to complete.

Last October a contract was signed with Danieli, Italy, for the delivery of main process equipment for the MMK Atakas A. S. JV. Danieli will supply equipment for both sites, in Iskenderun and Istanbul. The supply scope will include a 2.4 mtpy electric arc furnace, a twin ladle furnace, a two-station degasser, a CSP unit consisting of a two-strand near-net-shape caster and a hot rolling mill, a continuous pickling line, a two-stand reversing cold rolling mill, and two combined galvanizing and colour coating lines.

As Mr.Rashnikov stated at the ceremony, construction on the Iskenderun site will be completed this August, with the equipment to be installed in October and production at the Iskenderun service centre expected to be launched by the end of 2008. Overall, the plan is that in 2010 all the production facilities in Iskenderun and Istanbul will be put on stream.