Mechel's Equipment Testing Successful - Analyst Blog

Russian miner Mechel OAO ( MTL ) declared successful testing of equipment that produces coking coal concentrate at the Elga coal deposit's seasonal washing plant at the Republic of Sakha (Yakutia).

The coking coal concentrate producing equipment's adjusting and start-up procedures were also completed. The plant's production working shifts were framed to ensure 24 hours of operations.

The plant is expected to start its production at full capacity before the end of this month and is expected to produce nearly 50,000 tons of raw coal by the end of this year.

The test batch of the washing plant will be forwarded to Chelyabinsk Coke and Chemical Products Plant (Mechel Coke), which falls under Mechel's mining segment. Mechel have plans to export coking coal concentrate to foreign consumers in 2014.

Mechel, in June, declared the commencement of hot testing of rail rolls production at Chelyabinsk Metallurgical Plant's universal rolling mill. With the launch of hot testing, the company commenced the second stage of preparation for the launch of universal rolling mill. Earlier, in May, Mechel declared successful hot testing at its Universal Rolling Mill at Chelyabinsk Metallurgical Plant.

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 cost-cutting measures.

Mechel owns and controls essential infrastructure, including ports, rolling stock and power plants, which provide access to the export markets. However, high debt and interest burden are the challenges for Mechel and it might not be able to keep up with its huge capital spending program.

Mechel retains a Zacks Rank #4 (Sell).

Other companies in the steel industry with favorable Zacks Rank are Nippon Steel & Sumitomo Metal Corp. ( NSSMY ), Ternium S.A. ( TX ) and Kobe Steel Ltd. ( KBSTY ). While Nippon Steel and Ternium maintain a Zacks Rank #1 (Strong Buy), Kobe Steel maintains a Zacks Rank #2 (Buy).


MECHEL OAO ADS (MTL): Free Stock Analysis Report


TERNIUM SA-ADR (TX): Free Stock Analysis Report

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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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