A court in Australia has frozen part of the assets of Russia’s Magnitogorsk Iron Steel Works (MMK) in the country, in a disupte with Kazakhstan’s Eurasian Natural Resource Corporation (ENRC).
ENRC took MMK to court over an alleged breach of contract concerning iron ore supplies. Under the terms, MMK was due to buy 1 million tonnes of ore per month during 2011, but it reduced that to 700,000 tonnes according to the law suit.
The frozen assets are worth $866 million and include an almost 5% stake in Fortescue, Australia’s third largest iron ore producer.
Last month MMK made an offer to by iron ore producer Flinders Mines for $537 million. The Australian company’s management say they have been assured by MMK the deal will go ahead.
But analysts are concenred as they think MMK might have been considering using its assets in Fortescue as part of the deal to buy Flinders.