“During the third quarter we saw increasing price levels and strong demand for our mining products. This supported the healthy growth in the output of the segment,” Mechel chief Alexey Ivanushkin said of the company’s mining segment.

Mining segment revenue from external customers for the first nine months of 2006 was $975.4 million and operating income was $190.5 million.

Average realised prices in the third quarter of 2006 rose by 27% for iron ore concentrate, 29% for nickel, 3% for coking coal and 1% for steam coal, from levels of the second quarter 2006.

During the third quarter the company produced 4.28 million tonnes of coal, up almost 5% on the previous quarter.

In September, Mechel announced the commissioning of the Olzherasskaya Mine – part of the Southern Kuzbass coal company. Commissioning of the Olzherasskaya Mine will allow Southern Kuzbass OAO to increase its coal output by 1.8Mt in 2007.

Production in 2006 is expected to be 600,000t with output ramping up to 3Mt by 2010.

Mechel has invested $100 million in the mine’s construction.