Mechel OAO, one of the leading mining and metallurgical companies in Russia, has signed a Memorandum of Understanding with Baosteel Resources International Company Limited (China).
The Memorandum of Understanding was signed during the official visit of the First Deputy Prime Minister of Russia Igor Shuvalov to Beijing. Mikhail Urvantsev, Vice President of Mechel for Commercial Activities, was a member of the official delegation of Russia and signed the document on behalf of Mechel.
The memorandum stipulates that Mechel OAO, through its subsidiary Mechel Carbon Singapore, will supply Baosteel Resources up to 960,000 tons of coking coal per year. The price will be adjusted monthly. In addition, the memorandum provides for the implementation of joint projects in the mining sector on the territory of the Russian Federation, the People's Republic of China and third countries. The parties will consider the possibility of cooperation in other areas, including the possibility of cooperation with economic development institutions of Russia and China.
Mr. Evgeny Mikhel, CEO of Mechel OAO said that “Baosteel is an important partner for Mechel. We have managed to achieve mutually beneficial relationships for the supply of coking coal based on the principles of mutual trust and benefit. Given the current situation on the coal market with its high price volatility, we need guarantees of long-term and stable supply. The contract with Baosteel gives us exactly this opportunity. "
Mechel is one of the leading companies in Russia. Its business includes 4 segments: mining, metallurgy, ferroalloys and energy.
