Mechel, one of the leading Russian mining and steel groups, has announced that the positive dynamics of the world's markets and the improvement of its own performance have allowed it to fully resume its investment plans, which had been partially frozen before, and to revise its capital expenditure program for 2010-2012, foreseeing investments of about $3.7 billion, including $1.4 billion in 2010.
"We have again revised our capex program for the next few years. We are sure, that its implementation will give our company further impetus and open new opportunities for all segments of our business," Mechel senior vice president Vladimir Polin said.
Accordingly, apart from continuing to implement key strategic projects, some previously planned projects have been renewed and new projects have been approved.
In its mining segment, Mechel expects to invest approximately $2.1 billion in 2010-2012, which will be used to develop such key projects as the Elga coal deposit development, and the construction of the second stage of the Sibirginsk mine.
In its steel segment, Mechel will invest approximately $1.4 billion in 2010-2012. The company's investment plan for the period in question includes the construction of a universal rail and structural steel mill, a continuous bloom casting machine No. 5 and a continuous slab casting machine at its Chelyabinsk Metallurgical Plant, the reconstruction of an arc-furnace melting shop and construction of a mill-250 at Izhstal, the reconstruction of steelmaking facilities at its Romania-based subsidiary Otelu Rosu, and the reconstruction of the coke oven battery No. 6 at Mechel Coke and Gas Plant.
In addition, about $190 million in investment will be used by Mechel for the 2010-2012 capex program of its ferroalloy segment. This includes the modernization of Bratsk Ferroalloy Plant with the stage-by-stage increase of production volume by almost 1.5 times and also the switch to ferronickel production technology at the experimental industrial plant at Southern Urals Nickel Plant.
Mechel will also continue the development of its logistics capacities, including the modernization and widening of Port Posiet up to nine million mt of cargo shipments per year. The total investments in the development of logistics are planned to reach $97 million in 2010-2012.
In 2009, Mechel's capital expenditure amounted to $612.7 million, of which $366.9 million was invested in the mining segment, $208.7 million in the steel segment and $32.8 million in the ferroalloy segment.