Russian mining company
) recently announced the signing of an agreement with
Vnesheconombank for the allocation of the first tranche (worth
$150 million) of the project financing for Elga Coal Complex's
first stage aggregating $2.5 billion. The market reacted
positively to the news and Mechel's shares rose as much as 4.5%
following this announcement.
Vnesheconombank's Supervisory Board approved Mechel's application
for funding the development of its Elga Coal Complex in Sep 2013.
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 has a tenor of
13.5 years with a grace period until 2017.
Mechel has the requisite facilities for supporting this
project, such as 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. Mechel expects that the project will enable it to create an
industrial cluster that will cater to the economic growth of 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 project and also lead to social and economic development
of the Republic of Sakha (Yakutia) and the Far East as a
Mechel currently retains a short-term Zacks Rank #4
Other companies in the steel industry with favorable Zacks
Companhia Siderurgica Nacional
Shiloh Industries Inc.
). While both Companhia Siderurgica and Shiloh Industries
hold a Zacks Rank #1 (Strong Buy), Gerdau retains a Zacks Rank #2
GERDAU SA ADR (GGB): Free Stock Analysis
MECHEL OAO ADS (MTL): Free Stock Analysis
SHILOH INDS INC (SHLO): Get Free Report
CIA SIDERUR-ADR (SID): Free Stock Analysis
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