On July 21, Russian mining and steelmaking company Mechel announced that the production capacity utilization levels of its mining subsidiaries have increased by 63 percent in July as compared to the average indicator for January-August 2008.
The production capacity utilization rate of Mechel's iron ore concentrate producing subsidiary Korshunov Mining Plant has already surpassed 108 percent. Meanwhile, in July the production capacity utilization rates of Mechel's Southern Kuzbass and Yakutugol coal mining subsidiaries have increased by 62 percent and 57 percent respectively, as compared to May this year.
"The recovery of production witnessed in Russia's steel industry contributes to the increase in the domestic consumption of raw materials. Besides, we have managed to conclude a number of major long-term export contracts with Chinese, Japanese and South Korean companies in the first half of 2009, which enabled us to significantly increase utilization of our coking coal production capacities in the second quarter of 2009 and start their recovery to the pre-crisis level," said Mechel's senior vice president Vladimir Polin.
Mr. Polin went on to say, "Thanks to the new coal and iron ore concentrate domestic and export sales contracts, all Mechel's mining subsidiaries are currently secured with orders. That has allowed us to increase the overburden operations volume at the open pit mines of Mechel's coal mining assets, which was decreased in the fourth quarter of 2008, in order to reduce our production costs. According to our plans, that will enable us to ramp up the output of our coal mining subsidiaries to 70-75 percent of the pre-crisis level by September 2009."
As SteelOrbis previously reported, in the first half of the current year Mechel produced 2.28 million mt of coking coal, 3.129 million mt of coal concentrate (including 2.093 million mt of coking coal concentrate), 1.954 million mt of iron ore concentrate, and 1.263 million mt of coke.