Russian mining company
) announced that it has inked a contract with Austria's Binder
company for engineering services for the development of Elga Coal
Complex's first stage.
Per the contract, Binder will design the coal drying line which
will be enclosed in the production cycle at the washing plant.
The plant has an annual capacity of 9 million tons of coking
coal. This plant is part of Elga Coal Complex's first stage, and
its construction is expected to begin in the first quarter of
The state corporation Vnesheconombank will provide $2.5 billion
for the development of Elga Coal Complex's first stage. The first
stage includes completion of the railway's construction and
building a coal mining and processing complex whose capacity will
reach 11.7 million tons of run-of-mine coal by 2017.
According to the contract, the project work is expected to be
completed by the end of 2014. Post the completion of the project,
Mechel will decide whether it will extend the contract with
Binder to include supplies of project equipment for the washing
We note that Mechel has the requisite facilities to support
the Elga project. The company has its wagon fleet, port
facilities in the Far East and has long-term contracts with major
international steelmakers. The project is expected to create
about 5,000 new jobs. Mechel expects the project to enable it to
create an industrial cluster that will cater to the economic
growth of the entire region.
The Elga Coal Complex, located in southern Yakutia, is one of
the world's as well as Russia's largest deposit of high-quality
coking coal. Mechel believes that Vnesheconombank's financing
will boost its efforts to complete the first phase of the Elga
Mechel currently retains a Zacks Rank # 4 (Sell).
Other companies in the steel and related industries with
favorable Zacks Rank are
Century Aluminum Co.
Norsk Hydro ASA
). While NN retains a Zacks Rank #1 (Strong Buy), both Century
Aluminum and Norsk Hydro carry a Zacks Rank #2 (Buy).
CENTURY ALUM CO (CENX): Free Stock Analysis
MECHEL OAO ADS (MTL): Free Stock Analysis
NORSK HYDRO ADR (NHYDY): Get Free Report
NN INC (NNBR): Free Stock Analysis Report
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