OJSC Magnitogorsk Iron and Steel Works ("MMK") – one of the world's largest steel producers and a leading Russian metals company – has signed a contract with Metalloinvest concerning supplies of hot-briquetted iron (HBI) to MMK.

The contract was signed by Pavel Shilyaev, MMK’s CEO, and Andrey Varichev, Metalloinvest’s CEO, at the 22nd MetalExpo'2016 International Industrial Exhibition in Moscow.

The contract covers a one-year period during which time MMK will purchase 200kt of HBI from Metalloinvest. Pricing will be determined by a formula based on market indicators including domestic and global prices for metallurgical raw materials.

According to MMK, the contract will help partly substitute metal scrap with alternative raw materials inputs.

"Metalloinvest as a company and as a brand is closely associated with success in the mining business by leading iron ore and steel players, and with strong management and effective modernisation of steel production. By signing this contract today, we are strengthening the long-term and mutually beneficial relationship between our companies, said Shilyaev.

“HBI has firmly established itself as an effective addition to scrap for the production of high-quality grades of steel. It is very significant for us that key Russian consumers, such as MMK, recognise the advantages of this premium product," said Metalloinvest’s Varichev.

Metalloinvest claims to be a leading global iron ore and merchant HBI producer and supplier. It has the world's second-largest measured iron ore reserve base and purports to be one of the lowest-cost iron ore producers.