Mechel to increase supplies of coking coal to Baosteel

Mechel announced the conclusion of a memorandum of understanding with the Chinese steel corporation Baosteel Resources, providing for an increase in coking coal supplies to 1.4 million tons per year.

In accordance with the memorandum, the agreement will be valid from April 2015 to March 2016, with the possibility of further prolongation. Prices are determined on a monthly basis. The Memorandum also provides for the possibility of supplying Baosteel with other Mechel products, such as PCI and thermal coal, and also provides for cooperation in other areas, including with economic development institutions in Russia and China.

Mechel fully fulfills its obligations in accordance with the early contract, according to which 1.2 million tons of coking coal are supplied per year. From April to December 2014, over 1 million tonnes of coking coal were shipped to Baosteel's facilities in the eastern and southern provinces of China. They account for 10 percent of Mechel's coal exports to the Asia-Pacific region.

Oleg Korzhov, CEO of Mechel, said that "Long-term export contracts are especially important for us in times of market volatility, as they provide Mechel with stable foreign exchange earnings."

More than 70 percent of the mining division's products are currently exported. Mechel is an international mining and metallurgical company with over 70,000 employees. Its products are sold to Europe, Asia, North and South America, Africa.