Major Mechel recovery

RUSSIAN coal and steel producer Mechel posted a first-half net profit of $120.82 million – a major turnaround from the $471.38 million net loss in the first half of 2009.
Major Mechel recovery Major Mechel recovery Major Mechel recovery Major Mechel recovery Major Mechel recovery

Courtesy of Mechel.

Blair Price

Mechel’s net revenue increased 76.1% year-on-year to $4.3 billion for the first six months of 2010.

The company’s coal business performed well in the 2010 first half.

Coking coal concentrate production increased 136% year-on-year to 5.39 million tonnes.

Other metallurgical coal production, which included “various types” of anthracite and pulverised coal injection coal, jumped 274% to 1.13Mt while thermal coal output declined 17% to 4.15Mt.

Mechel also ramped up its coke production 52% year-on-year to 1.92Mt.

“First half of the year was the period of hard and intense work for us. As a result we succeeded in resolving a number of challenging tasks,” Mechel chief executive officer Yevgeny Mikhel said.

“To be more specific, we restored coal production volumes to pre-crisis levels, brought down costs in the mining segment to their normalised levels, strengthened the position of the steel segment through new acquisitions and launch of new equipment at the existing steel plants, and continued geographic expansion of our distribution network,” he said.

“At the same time we continued with our Capex program and streamlining of the group’s management structure.

“During the reported half-year period, [the] pricing environment on our main markets has been rather favourable, which allowed us to improve the company’s operational and financial results considerably.”

The Raspadskaya mine disaster in May will also bolster domestic demand for Mechel’s met coal this half.

The Siberian mine is expected to restart longwall mining in the next three months.