Yildirim Group is the favourite to buy Mechel’s Voskhod Mining Plant and 120,000 tpy Tikhvin Ferro-alloys Plant, Metal Bulletin understands.

The Turkish industrial company and owner of chrome producers Eti Krom and Vargon Alloys is the final company in the bidding for the chrome assets, a number of market sources told Metal Bulletin.

The deal is still being negotiated and the price remains unclear, with some sources saying it could be as much as $500 million, but others doubting the bidding would have gone that high.

Throughout the sale process there has been a lack of clarity around what the assets – a chrome mine in Kazakhstan and the smelting operation in Russia – would be sold for, observers say.

Mechel previously asked for as much as $250 million, according to sources close to the proceedings, but other informed observers said the assets may be worth less than $100 million.

Russian mining and metallurgical group Mechel put the assets on sale in September 2012 with a range of other “non-core” assets and by April, six parties were understood to be still in the bidding process.

The Tikhvin plant consumes half the capacity of the Voskhod mine and can produce 120,000 tpy of high carbon ferro-chrome, with 69.5% chrome content.

Tikhvin is Russia’s second-largest producer of high carbon ferro-chrome.

Companies including Glencore, ENRC, Outokumpu and private Kazakh hedge fund Verny Capital all showed interest at some stage in the process, Metal Bulletin understands.

Robert Yildirim, the billionaire who runs Yildirim Group, has expressed interest in other chrome assets over the past year and has said the company could play a role in the consolidation of South Africa’s chrome industry.

Yildirim Group declined to comment.

A spokesman for Mechel confirmed that the company was in talks over the sale of the assets but declined to give further details.

Janie Davies 
jdavies@metalbulletin.com
Twitter: @janiedavies_mb