20 Jan 2011 16:04

Mechel boosts coking coal concentrate output 52%, roll 16% in 2010

MOSCOW. Jan 20 (Interfax) - Mechel boosted coking coal concentrate output 52% to 11.5 million tonnes in 2010, the company said in a statement.

Steam coal production fell 6% to 8.1 million tonnes.

Steel roll output grew 16% to 6.2 million tonnes.

Mechel operating results ('000 tonnes):

Product 2010 2010/2009, %
Coking coal concentrate 11 506 +52
Various types of coal for steel production 1 992 +176
Steam coal 8 083 -6
Iron ore concentrate 4 210 +0,1
Chromite ore concentrate 255 +21
Nickel 17 +7
Ferrosilicon (65% and 75%) 90 +5
Ferrochrome (65%) 82 -1
Coke 3 884 +20
Pig iron 4 150 +9
Crude steel 6 073 +11
Roll 6 168 +16
Billets 2 212 +28
Hardware 868 +35
Forgings 76 +54
Stampings 97 +57
Electric power generation ('000 kWh) 4 019 637 +15
Heat power generation (GCcal) 6 725 230 +4

"The Group's 2010 operational results demonstrate that we not only managed to return to pre-crisis levels, but to exceed them," said Yevgeny Mikhel, Mechel's CEO.

In the mining division, the overall coking coal production exceeded last year's figures by 52%. Output of other types of metallurgical coal has grown by 176%. "These results enabled us to benefit from the positive trends on the global coal markets and give us a good starting point for the year 2011, when we expect to add volumes from our existing operations as well as from Elga, where we have already stripped the coal seams and prepared coal for extraction," Mechel said.

The steel division worked at full capacity, consistently increasing the volumes of production for high value-added products. As a result, hardware production reached record levels.

"In 2010, we added Romania-based steel plant Laminorul Braila to our steel segment. We also continue to strengthen our position by upgrading our existing assets. This year has seen the completion of the first stage of Izhstal's modernization, the launch of a new high quality and stainless steel production complex at Chelyabinsk Metallurgical Plant, new processing lines at Beloretsk Metallurgical Plant and other equipment at the Group's subsidiaries. Steel production increased by 11% compared to last year's figures, hardware output went up by 35% and rolled products output has grown by 16%."

Mechel's flagship enterprise, Chelyabinsk Metallurgical Plant , said it boosted roll output 9% last year to 4.504 million tonnes. The plant, which sells 80% of its output in Russia, said crude steel production rose 10% and that production of sinter, pig iron, crude steel and saleable roll exceeded the successful pre-crisis year of 2007.

Mechel said ferroalloy production volumes in 2010 also exceeded last year's results in nickel and ferrosilicon production.

In the power division, the 2010 operating results offer "good perspectives for the segment's development." "We see a confident growth in power and heat generation and are looking with optimism to the liberalization of Russia's electricity market. In line with the power segment development strategy, Mechel increased its stake in the charter capital of Bulgaria's Toplofikatsia Rousse power station up to 100%. This opens new opportunities for selling electricity in the European market."

The Mechel group has consolidated controlling stakes in coal, steel and iron ore companies and a number of ports. General Director Igor Zyuzin is Mechel's chief beneficiary. The ADR free float is around 30%.


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