(Adds details, context)
MOSCOW, April 21 China may help finance steel
and coal producer Mechel's costly Elga coal project in
Russia and supply equipment for it in exchange for coal, a
senior executive at a Russian state bank said on Monday.
Mechel is saddled with $9.4 billion in debt but is seeking
to develop Elga, which has among the biggest reserves of coking
coal in the world. Development of the project in remote Yakutia
has been stymied for decades by poor transport links.
"Some of the equipment will be supplied by China and coal
exports will go in part to China," Alexander Ivanov, deputy head
of Vnesheconombank's management board, told reporters in Moscow
He said the chances were high that Mechel would reach a loan
deal with China Exim Bank, although he declined to say how large
the loan might be.
Vnesheconombank had previously agreed to lend $2.5 billion
to the project and is now organising additional financing. It
has granted funding for the first stage of the project, which
includes completion of railway construction and coal mining and
a processing complex.
Analysts said a year ago that development of Elga, which has
proven reserves of 2.2 billion tonnes, could cost $2 billion to
(Reporting by Oksana Kobzeva; Writing by Polina Devitt; Editing
by Steve Gutterman)