Mechel forced to cut coal prices by 15%

RUSSIAN coal giant Mechel has been forced to cut its coking coal prices by 15% starting from September 1, as a government punishment for abusing its market position.

Vivienne Ryan

Mechel will also be fined 5% of its coking coal revenues of last year ($US32.2 million) for its misdemeanours, news agency Interfax reported Russia’s antitrust watchdog as saying.

“We will recommend the company lower its prices by 15 percent to the end of the year from September 1,” Federal Antimonopoly Service head Igor Artemyev told Interfax.

Mechel’s actions recently drew the wrath of Russian Prime Minister Vladimir Putin who attacked the company’s pricing policies, as well as those of other coal majors.

Mechel’s coking coal competitor, Raspadskaya, and Russian steelmaker Evraz are also subject to an antitrust investigation, newsagency Reuters reported.

A Russian mining analyst estimated Mechel’s lost revenue from the penalties would be $US45 million in the last four months of the year.