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Mechel and Baosteel Sign Memorandum of Understanding
04/15/2013 - Mechel OAO announced the signing of a memorandum of understanding with Baosteel Resources in which a Mechel subsidiary will supply Baosteel with up to 960,000 tonnes of coking coal annually.
Mechel OAO, a Russian mining and metals company, announced the signing of a memorandum of understanding with Baosteel Resources Int. Co. Ltd.
During an official visit by Russia's First Deputy Prime Minister Igor Shuvalov to Beijing, Mechel and Baosteel Resources signed the memorandum of understanding. Mechel's vice president for commercial activities Mikhail Urvantsev, who was part of Russia's official delegation, signed the document on behalf of Mechel.
The memorandum stipulates that Mechel OAO, through its subsidiary Mechel Carbon Singapore, will supply Baosteel Resources with up to 960,000 tonnes of coking coal annually. The price will be corrected monthly.
In addition, the memorandum allows for the implementation of joint projects in mining resources in the territory of the Russian Federation, People's Republic of China and third countries. The sides will consider the possibility of cooperation on other fields as well, including the possibility of collaboration with the economic development institutes of the Russian Federation and the People's Republic of China.
"Baosteel Resources is an important partner for Mechel. We managed to achieve mutually profitable ties on coking coal supplies, based on the principles of mutual trust and benefit. Considering the current situation in the coal market with its high price volatility, we need guarantees of long-term and stable supplies. The contract with Baosteel Resources gives us precisely that opportunity," Mechel OAO's chief executive Officer Evgeny Mikhel noted.
Mechel is a leading Russian company. Its business includes four segments: mining, steel, ferroalloy and power. Mechel unites producers of coal, iron ore concentrate, nickel, ferrochrome, ferrosilicon, steel, rolled products, hardware, heat and electric power. Mechel products are marketed domestically and internationally.
