Mechel announces the sale of Mechel Coal Resources
Russian mill
Mechel today announced the sale of
Mechel Coal Resources, coal mining subsidiary located in
Kazakhstan, for approximately $12 million.
Mechel acquired
Mechel Coal Resources in 2003. The company had a closed mine when
Mechel acquired it. In 2005,
Mechel Coal Resources restored mining operations, however mined only 23,000 tons of coal in the first nine months of 2005. This
production level is quite insignificant when compared with
Mechel's Russian coal facilities, which mined more than 11.7 million tons of coal in the same period of 2005.
Commenting on the subject, Vladimir Iorich,
Mechel's CEO, said, “Today
Mechel owns one of the largest coal reserves base among Russian producers. In 2005 alone, we increased our
coking coal reserves by 1.15 billion tons, based on the Russian valuation standards. The dynamic growth of this huge resource base requires significant financial and managerial efforts. We believe it is a logical move to drop a small and remote asset and focus on our Russian operations with their vast existing infrastructure and experienced staff.”