Mechel chairman and main owner Igor Zyuzin is making a market for his product in India.
Photo: Dmitry Azarov
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Mechel Sails Three Seas
Mechel will make its own overseas consumers for its Irkutsk coal. The company plans to build a coking plant in India and deliver 10 million tons of coal per year to it. It will also build new ports to ease deliver of its coal, according to unconfirmed reports. Mechel deputy general director Oleg Rozenberg stated at a Russian-Indian trade and investment forum yesterday that a local partner was being sought to implement the Indian project. Mechel will retain control over that joint venture. The investments involved were put at “hundreds of millions of dollars.”
India was chosen as the site of the new plant because of its rapid economic growth. The country intends to double its steel production to 100 million tons by 2012. Russia is the world's third largest coal exporter (after Australia and Indonesia), but only the Russian companies Sibuglemet, Raspadskaya and Yakutugol (which belongs to Mechel) export coal to the Asian-Pacific region. Having acquired Yakutugol and gained control over Elgaugol last autumn, Mechel plans to increase its coal production in Siberia from 10 million to 15 million tons per year before Elgaugol begin functioning in 2011-2012 and produces 9 million tons per year more.
Observers say the Mechel plan is a good one. Australia is the top provider of coal to India now, but Russian coal will be cheaper because of lower shipping costs. India is a convenient location from which to ship coke to growing markets in the Middle East and China, as well as Japan.
www.kommersant.com
All the Article in Russian as of Feb. 14, 2008
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