Magnetation Completes $375MM Financing
Magnetation said it has successfully completed a $325 million senior secured notes offering and has entered into a $50 million senior secured credit facility.
The proceeds from the notes offering will be used for capital expenditures to construct a new concentrate reclamation plant northwest of Coleraine, MN and a new manufacturing plant in Reynolds, 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 Ohio and Kentucky.
In addition, Magnetation announced that it has received a $50 million contribution from AK Steel as part of AK steel’s remaining $150 million commitment to Magnetation. Thus far, AK Steel has invested approximately $200 million of a planned $300 million. AK Steel will contribute the final $100 million during 2014 or as needed to support the construction of the new pellet plant.
“We are excited to announce that our expansion projects are now fully funded,” said Larry Lehtinen, CEO of Magnetation. “With this financing secured, we anticipate producing high quality fluxed pellets during the fourth quarter of 2014. Upon startup of the pellet plant and Plant 4, Magnetation will become a 4 million tonne per year iron ore producer employing about 500 people, providing high quality iron oxide pellets to AK Steel, low residual iron ore concentrate to AHMSA of Mexico and high grade iron oxides to various specialty market customers. We couldn’t be more pleased with the progress made by all of our team members and stakeholders.”