Russian mining company
) announced that Vnesheconombank's (VEB) Supervisory Board has
approved its application for funding the development of its Elga
Coal Complex, located in southern Yakutia. The VEB approved of a
$2.5 billion financing for the completion of the first stage of
The first stage will include construction of a railroad and a
mining and washing complex with an annual capacity of 11.7
million tons of run-of-mine coal by 2017. The loan holds a tenor
of 13.5 years with grace period until 2017.
Mechel has already invested over $2 billion in the project
over the past 5 years and with the help of VEB funds the company
will be able to provide the required coal to its customers.
Mechel has the requisite facilities including its own wagon
fleet, port facilities in the Far East and long-term contracts
with major international steelmakers.
The project is expected to create about 5,000 new jobs. With
the project, Mechel intends to create an industrial cluster that
will cater to the economic growth of the entire region. Elga is
one of the world's as well as Russia's largest deposit of
high-quality coking coal.
Last month, Mechel also announced that it has begun supplying
coal concentrate to the People's Republic of China by rail
through a new border checkpoint. The route from Makhalino in
Russia goes to Hunchun in China. The opening ceremony for the new
border checkpoint was attended by over 200 officials representing
Mechel is a leading domestic steel and coal producer with a
strong position in key businesses, including production of
specialty steel and alloys. The company has the largest coal
reserve base in Russia and is mainly focusing on growth and
Mechel currently retains a short-term Zacks Rank #3
Other companies in the steel industry with favorable Zacks
Nippon Steel & Sumitomo Metal Corp.
Companhia Siderurgica Nacional
Shiloh Industries Inc.
). All of them hold a Zacks Rank #1 (Strong Buy).
MECHEL OAO ADS (MTL): Free Stock Analysis
NIPPON STEEL CP (NSSMY): Get Free Report
SHILOH INDS INC (SHLO): Get Free Report
CIA SIDERUR-ADR (SID): Free Stock Analysis
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