Mechel Announces That It Has Won An Auction To Develop A Coking Coal DepositMoscow, Russia – November 11, 2004 – Mechel, a Russian metals and mining company, announced today that its subsidiary, Southern Kuzbass Coal Company, has won an auction to develop a coking coal mine in the Sibirginskaya Mine area in the Kuzbass region of Russia.
According to a decision of the auction committee, Mechel will receive a license through its subsidiary, Southern Kuzbass OAO, for the use of reserves of the Sibirginskaya mine area of the Sibirginsky and Tomsky coking coal deposits. The coal reserves of the license area are estimated at approximately 65 million tonnes, based on Russian standards for reserve evaluation. The auction conditions require a minimum of 1.4 million tonnes of extraction annually during the first stage of development, and 2.4 million tonnes of extraction annually during the second stage of development. The license will be valid for 20 years.
“The development of our mining segment, and the development of coking coal mining in particular, is one of the priorities of Mechel’s strategy. The fact that we received this important license to develop a new coal area adjacent to our existing areas will strengthen our position in the market for raw materials for the production of steel,” Mechel’s CEO, Vladimir Iorich, said, commenting on the results of the auction.
Mechel Steel Group OAO
Director of Communications