Russian ministry, Mechel to form taskforce to tackle Yuzhuralnickel problems
ORENBURG. Nov 6 (Interfax) - Russia's Industry and Trade Ministry will set up a working group with representatives of steel and coal group Mechel to look for ways to bring Mechel's Southern Urals Nickel Plant (Yuzhuralnickel) out of its crisis, the press service of the Orenburg regional government said, citing Governor Yury Berga.
Industry and Trade Minister Denis Manturov and Berg discussed the situation at Yuzhuralnickel, which suspended production a month ago, during a meeting in Moscow on November 1, the press service said in a statement.
The working group "is supposed to work out measures to save the plant and propose a so-called road map, a plan of action to bring the plant out of crisis," the statement said.
"At stake is the fate of the plant's workforce of 3,000, which is currently occupied with work on maintenance and repair of production equipment," the statement said.
Yuzhuralnickel management has said that nickel production has been loss-making for the past few years due to low prices for the metal, the heavy energy costs of producing it, and high transportation costs, the regional government said.
Yuzhuralnickel suspended production in all divisions on October 1 to conduct equipment repairs. All of the plant's employees have been involved in the repairs, with their salaries maintained.
Alexei Ivanushkin, the chief executive of Oriel Resources Limited, which consolidates Mechel's ferroalloy assets, said at a meeting with the regional governor that urgent government support is needed in order to maintain production at Yuzhuralnickel at previous levels, including lower electricity and ore shipment costs and a lighter tax burden.
The government said at a meeting with the plant's workers that a final decision on the plant's future would be made after negotiations in Moscow, because these problems can only be resolved at the federal level.
Mechel officials were unavailable for comment on Friday.
Yuzhuralnickel has two nickel ore mines - Sakharinsk and Buruktalsk - that provide it with a supply of raw materials. The plant exports 80% of the alloy it produces. The plant also supplies products to Mechel's other enterprises that produce alloyed steel, structural and other types of steel.
