Mechel signs agreement with Italian manufacturer

Russian mining and metals company Mechel has signed a partnership agreement with Danieli, an Italian firm specialising in the development technologies and manufacturing equipment for steel production.

The agreement covers the reconstruction and development projects for Mechel's steel subsidiaries.

According to the three-year agreement, Danieli will provide Mechel with engineering and technical support to assist Mechel's development plans.

"We have been successfully working with Danieli for a long time, and now we have fortified our reliable partnerships. Danieli’s equipment already operates well at our subsidiaries, specifically two continuous billet casting machines at Chelyabinsk metallurgical plant,” comments Mechel management chief executive officer Vladimir Polin.

Mechel is a low-cost integrated mining and metals group which encompasses mining, steel production and processing and power generation. It has facilities in Russia, Romania, Bulgaria and Lithuania. Mechel is the largest producer of coking coal in Russia with a 64% share for hard coking coals. It is also Russia’s largest exporter of coking coal concentrate.
Mechel’s energy business consists of power generation capabilities in Russia, a 49% stake in a Bulgarian coal-fired power station and a power sales company which controls 50% of the energy market in the Kemerovo region of Siberia.

Mechel made its debut in the international loan syndications market last year, closing general syndication on a dual-tranche US$2bn loan in January. This facility was raised to refinance short-term loans taken out to support the acquisition of mining assets. The facility was lead arranged by ABN Amro, BNP Paribas, Calyon, Natixis, SMBC, Soci&eaute;té Générale and Commerzbank. (Click here to read previous coverage on Mechel, GTR eNews March 27, 2008).