UPDATE 1-Mechel placement to price in July, may raise $2 bln

(Adds details, background, share price)

By Olga Popova

MOSCOW, June 19 (Reuters) - Mechel (MTL.N), Russia's largest coking coal miner, could raise over $2 billion in a preferred share placement in Frankfurt and Moscow that will price by July 22, a source close to the placement said on Thursday.

New York-listed Mechel, also Russia's sixth-largest steel maker, will launch a roadshow on July 2 after announcing the placement on June 23 or June 24, the source told Reuters on condition of anonymity.

Mechel officials were not immediately available for comment.

The source said the placement would raise over $2 billion were Mechel to place its entire allocation of preferred shares, more than the $1.5 billion quoted in April by a banking source as the company's ordinary stock has risen in value since.

However, the source said he did not know whether Mechel would issue the full amount of preferred shares.

Mechel, controlled by billionaire Igor Zyuzin, last year acquired substantial coal assets in the Russian Far East, including the country's largest untapped coal field.

It also agreed in March to acquire ferro-chrome producer Oriel Resources OLR.L ORL.TO for $1.5 billion. Mechel has secured a 12-month bridge loan to cover the purchase, which is being arranged and underwritten by ABN AMRO and Merrill Lynch.

Mechel also plans to spin off its mining assets and sell a stake of at least 20 percent in a new company valued by Zyuzin at $20 billion compared to Mechel's current market value of $17.1 billion. The firm has not said when, or on which bourse, this initial public offering would take place.

Mechel's New York-traded stock was up 1.3 percent at $53.47 by 1440 GMT. It has risen over 60 percent since the start of the year, boosted by high commodity prices, and hit a record high of $58.66 last month. (Reporting by Olga Popova, writing by Robin Paxton; editing by Tony Austin)