Son of Russian steel town raises profile in deal with Arcelor

Alexei Mordashov's life has always been tied to the steel plant in Cherepovets, the industrial city in northwest Russia where he was born.

The son of an engineer and an administrator at the sprawling Soviet plant, where he worked his way up from economist to CEO of steel giant Severstal in eight years, Mordashov has seen his relationship with the concern pay off.

At 40, he commands a US$7.6 billion (Ђ6 billion) fortune, according to Forbes, and with his asset swap deal announced Friday with steel giant Arcelor he has been propelled into being Russia's ambassador to the international steel industry.

"His profile has completely changed," said Tim McCutcheon, a partner at the DBM Capital investment fund in Moscow. "He's on a global stage now."

Mordashov called the deal a "breakthrough" for Severstal and the Russian industry's image.

"It's a new position for us," Mordashov told the Associated Press. "It's a new culture for us Russians, it's a big step forward. With Russian participation, a big chunk of Russian capital, a huge and undisputed leader in world steel market is being created."

Russia's Finance Minister trumpeted the deal as an example of the nation's renewed economic clout on the world stage in a revival that has largely been boosted by soaring prices for its raw materials oil and steel chief among them.

"Russia is entering the world market, it is becoming integrated," Russian Finance Minister Alexei Kudrin said in televised comments. "In this case Severstal has taken the decision to find itself a ... partner that will have an overall effect on the world economy and Russia, of course."

Now, with a 32 percent stake in Arcelor, Mordashov will have "de facto right of first refusal over all major decisions made at the company," McCutcheon said.

While Arcelor's move has drawn criticism from Mittal Steel Co. which has been fighting for Arcelor as a last-ditch attempt to escape takeover, the deal might not be a problem for the EU, where Severstal is likely to be perceived as more employee-friendly, reports AP.

O.Ch.