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Mechel Installs New Coal Washing Technology at Elga Complex - Analyst Blog

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Russian miner Mechel OAO ( MTL ) announced that it has installed new coal washing and dewatering technology at Elga Coal Complex's seasonal washing plant. The company has launched a two membrane filter presses which will allow the complex to filter slime waters under pressure and make intensive mechanical dewatering of small coal fractions. The two membranes are produced by Tecnicas Hidraulicas.

Mechel's investment in this technology will amount to about $2 million. With the technology in place, the washing plant's end-product capacity will increase by 10% (from 2 million tons to 2.3 million tons annually) and cut the facility's consumption of process water by 2.5-3 times.

The new technology complies with the ecological safety requirements as per the Russian environment protection law. It enables the plant to loop the ultrafine coal and clarified water system and fully exclude the possibility of waste waters getting into external hydraulic facilities. Construction at the Elga Coal Complex is being carried out with an aim to enable Mechel to make the Elga project one of global leaders in terms of cost efficiency and profit.

The tons mined at the Elga coal deposit consisted of high-quality coking coal. Work still continues on transferring Elga's seasonal washing plant to all-year operation mode. The work is expected to be complete by Oct-Nov. This will enable the plant to have an annual capacity of 2.7 million tons.

Currently RAO Energy System is Far East's leading supplier of electricity and heat as well as the leading consumer of steam coal in the country, which accounts for more than 50% of the company's energy balance. Mechel believes that having stable supply of the Elga deposit's coal products will enable it to break the monopoly of Far East's coal market and expand the range of coals used by power stations.

Elga is a key project for the entire Russian coal industry. Its development will enable Mechel to consolidate its position in the Far East and its reputation as a major coal exporter to Asia Pacific.

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 currently carries a Zacks Rank #4 (Sell).

Other companies in the steel industry with a favorable Zacks Rank include Grupo Simec S.A.B. de C.V. ( SIM ), Olympic Steel Inc. ( ZEUS ), and ThyssenKrupp AG ( TYEKF ). While Grupo Simec sports a Zacks Rank #1 (Strong Buy), Olympic Steel and ThyssenKrupp carry a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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