Profile: Mechel OAO (MTL.N)
Mechel OAO, incorporated on March 19, 2003, is an integrated mining, steel, ferroalloys and power company. The Company operates in four segments: mining, steel, ferroalloys and power. Its mining segment produces coking and steam coal, as well as iron ore and iron ore concentrate. The mining segment consists of coal and iron ore mines in Russia and the United States. Its steel segment produces and sells semi-finished steel products, carbon and specialty long products, carbon and stainless flat products and value-added downstream metal products, including wire products, stampings and forgings. The Company’s steel and steel-related production facilities in Russia include two integrated steel mills, a coke plant, a wire products plant, a forging and stamping mill and a scrap processing facility in the southern Ural Mountains, a wire products plant in northwestern Russia near the border with Finland and a coke and coal gas plant near Moscow. Its ferroalloys segment produces and sells low-ferrous ferronickel, ferrochrome and ferrosilicon. Its power segment produces and sells electricity to internal and external customers. In November 2010, the Company acquired 51% stake in the charter capital of Toplofikatsia Rousse AD. In March 2011, the Company liquidated its wholly owned subsidiary, Mechel-Finansy OOO. In March 2011, the Company acquired a 100% stake in PartnerPortfelInvest OOO. In April 2011, the Company acquired Mechel-Garant OOO.
In April 2010, the Company acquired Laminorul Braila metallurgical plant located in Romania. On February 25, 2010, the Company acquired Donau Commodities SRL, which owns 90.9% interest in Laminorul Plant S.A. Braila (Laminorul Plant), a steel plant located in Braila (Romania). In May 2009, the Company announced that its subsidiaries have closed the acquisition of United States entities Bluestone Industries, Inc., Dynamic Energy, Inc., JCJ Coal Group, LLC, and some of its West Virginia affiliates (together Bluestone), West Virginia-based coal businesses engaged in the mining, processing, and sale of hard coking coal. On March 10, 2009, the Company established Mechel Service Global B.V. In February 2009, the Company acquired 100% interest in Skyblock Limited, a manufacturer of steel products. In February 2009, it acquired 100% interest in Bluestone Coal.
The Company’s subsidiary Southern Kuzbass Coal Company and its subsidiaries operate coal mines located in the Kuznetsky basin, near Mezhdurechensk in southwestern Siberia. These mines include four open pit mines and three underground mines. Its subsidiary Yakutugol operates coal mines located in the Sakha Republic in eastern Siberia, consisting of two open pit mines and one underground mine. Yakutugol also holds the license to mine the undeveloped Elga coal deposit. Its Bluestone subsidiaries operate four mining complexes in West Virginia, United States, consisting of open pit and underground mines. It provides coal washing services, both to its coal-mining subsidiaries and to third parties.
The Company’s produces coking coal and steam coal concentrates, as well as iron ore, iron ore concentrate and limestone. Its coal operations consist of Southern Kuzbass Coal Company, Yakutugol and Bluestone, which together produced 10.2 million tons of coking coal and 7.5 million tons of steam coal during the year ended December 31, 2009. Its iron ore operations consist of Korshunov Mining Plant, which produced 11.3 million tons of iron ore and 4.2 million tons of iron ore concentrate during 2009. Its limestone operations consist of Pugachev limestone quarry, which produced 1.9 million tons of limestone during 2009. The Company’s coal mines are primarily located in the Kuznetsky basin, a major Russian coal-producing region, and in the Sakha Republic in eastern Siberia.
The Company’s steel segment consists of production and sale of semi-finished steel products, carbon steel long products and specialty steel long products, carbon and stainless flat products, and value-added downstream metal products, including wire products, stampings and forgings. Its steel segment is supported by its mining segment, which includes coal (steam and coking coal), iron ore and limestone, and its ferroalloys segment, which includes ferronickel, ferrochrome and ferrosilicon. Its steel segment has production facilities in Russia, Lithuania and Romania. Its total crude steel output was 5.5 million tons during 2009. It offers customers coke from its Moscow Coke and Gas Plant, and Mechel-Coke. The Company produces coke in its subsidiaries Moscow Coke and Gas Plant, and Mechel-Coke. It offers its customers coal tar, naphthalene and other compounds. Its offers semi-finished billets, blooms and slabs. Its long products are manufactured at Chelyabinsk Metallurgical Plant, Izhstal and Beloretsk Metallurgical Plant in Russia, and Mechel Campia Turzii, Mechel Targoviste and Ductil Steel in Romania. The Company offers its customers a selection of long steel products produced from various kinds of steel, including rebar, calibrated long steel products, steel angles, round products, surface-conditioned steel products, wire rod and others. Its wire products are manufactured at Izhstal, Beloretsk Metallurgical Plant and Vyartsilya Metal Products Plant in Russia, Mechel Campia Turzii in Romania and Mechel Nemunas Co. Ltd. (Mechel Nemunas) in Lithuania.
The Company’s ferroalloys segment produces and sells low-ferrous ferronickel, ferrochrome and ferrosilicon produced at Southern Urals Nickel Plant, Bratsk Ferroalloy Plant and Tikhvin Ferroalloy Plant. It offers its customers ferrosilicon from its Bratsk Ferroalloy Plant. Southern Urals Nickel Plant operates two open-pit nickel ore mines, Sakhara and Buruktal, as well as a nickel production plant in Orsk. The Sakhara mine is located east of the Ural Mountains in the Chelyabinsk region, about 370 kilometers north of Orsk. The Buruktal mine is located east of the southern tip of the Ural Mountains, in the Orenburg region, close to the border with Kazakhstan.
The Company’s power segment generates and sells electricity. Its power segment consists of a power generating plant, Southern Kuzbass Power Plant, power generation facilities at Chelyabinsk Metallurgical Plant, Moscow Coke and Gas Plant and Urals Stampings Plant with installed capacity of 220 megawatts, 30 megawatts and 3.5 megawatts respectively, and a power sales company, Kuzbass Power Sales Company. Its subsidiary, Mechel-Energo, manages its power business. The Company also holds a 49% interest in Toplofikatsia Rousse, a power plant in Bulgaria. The Southern Kuzbass Power Plant is located in Kaltan in the Kemerovo region, which is south of Russia’s coal-rich Kuzbass district. Kuzbass Power Sales Company is located in the Kemerovo region and is power distributing company in Siberia. Toplofikatsia Rousse is a power plant located on the bank of the Danube River in close proximity to the harbor of Rousse, Bulgaria.
1, Krasnoarmeyskaya st.
Company Web Links
- Fitch: Mechel Resolution Likely to Have Limited Impact on Bank Ratings
- UPDATE 2-Russian officials at odds over Mechel bailout
- Russia's plans to bail out miner Mechel suggest ownership change-aide
- UPDATE 1-Russia sees Mechel debt restructuring as best option - Putin aide
- Restructuring debts of Russia's Mechel better than bankruptcy - Putin aide