Russia's Mechel gets over 90% takers for Oriel bid

MOSCOW, April 17 (Reuters) - Russian miner and steel maker Mechel (MTL.N) said on Thursday its $1.5 billion offer to buy Oriel Resources OLR.L had become unconditional after acceptances exceeded the required 90 percent.

New York-listed Mechel, controlled by billionaire Igor Zyuzin, said in a statement it had received acceptances in respect of 95.69 percent of Oriel's existing issued ordinary share capital as of 1200 GMT on April 16.

Mechel said it expected Oriel's shares to cease trading on London's Alternative Investment Market on or around May 6.

The all-cash acquisition of Oriel, which produces ferro-chrome in Russia and is developing chromite and nickel mines in Kazakhstan, will give Mechel increased access to valuable raw materials used in steel making.

Mechel this week also received approval for the deal from antitrust authorities in Russia and Kazakhstan.

Ferro-chrome, used in stainless steel, is trading at record highs as power shortages in top producer South Africa coincide with booming demand in China.

Mechel has said it would pay 219.86 U.S. cents for every share in Oriel -- a 13.7 percent premium to Oriel's closing price on Feb. 29, the day before Mechel said it was considering an offer.

Oriel Resources ORL.TO, also listed in Toronto, last year launched production of ferro-chrome at a new smelter in Tikhvin, 200 km (125 miles) east of St Petersburg. Last year's output of 28,770 tonnes is forecast to rise to 148,000 tonnes this year.

Oriel imports chromite ore for the smelter but plans to launch its own mine, Voskhod, in Kazakhstan in the third quarter of this year. It also owns a nickel project, Shevchenko, in the Central Asian republic, which is slated to start in late 2009. (Reporting by Robin Paxton, editing by Will Waterman)