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Russian billionaire Usmanov in talks to buy Ukraine steelmaker

Russian billionaire Alisher Usmanov is in talks to buy a Ukrainian steelmaker to form the biggest vertically integrated metals holding in the former Soviet Union.

Usmanov's Gazmetal holding, which controls 40% of Russia's iron ore output, is in talks to acquire Industrial Union of Donbass, or ISD, Gazmetal CEO Maxim Basov said via a spokeswoman today. The two companies have already agreed to „tighter commercial, financial, investment, and strategic cooperation,” Gazmetal spokeswoman Yulia Mazanova cited Basov as saying, confirming a report earlier today in the Vedomosti newspaper. The combination would produce 15 million tons of steel and 38.1 million tons of iron ore concentrate, a key raw material for the metal, a year. Billionaire Alexei Mordashov's OAO Severstal, Russia's biggest steelmaker, produced 17.6 million tons of crude steel and 4.5 tons of iron concentrate last year. Usmanov also heads Gazprominvestholding, the investment arm of state-run OAO Gazprom, the world's biggest natural-gas company. Gazprom earlier this month said it would acquire form a venture with Siberian Coal Energy Co., the country's biggest producer of the fuel, which is used to make steel. (Bloomberg)