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TheStreet Open House

Mechel's CEO Discusses Q1 2012 Results - Earnings Call Transcript

[Foreign Language]

Concerning our activities on the key areas of strategic business development especially mining, I have to note that at the end of last year, a railroad linking Baikal-Amur Mainline and Elga deposit was opened.

Early this year, we started construction of the seasonal washing plant, another infrastructure facility that is essential for Elga development. We expect to complete construction by the end of July, which will enable shipments of readymade coking coal concentrate directly from deposit already in this year, thus enhancing the project efficiency.

[Foreign Language]

We mustn’t forget that in the coming years, Mechel’s mining segment will develop not only by building up production of Elga. Coke cruisers of the Southern Kuzbass are estimated to be around 700 million pounds. From the start of the year in the Southern Kuzbass, we made progress with one of our most important current project, construction of the second line at Sibirginskaya mine.

By May, we completed funneling of the vertical shaft that took us several years and at this moment, we begin to reinforce it. We expect to work the second line at Sibirginskaya mine in 2014, thus doubling its production and bringing it to 2.4 million tonnes of coal a year.

[Foreign Language]

Considering a serious operation production of coal in the coming years, we focus on development of own port facilities to ensure efficient access to the most promising markets. From the start of the year, we manage to make progress and expand in the capacity of Port Posiet our gate to the Asia Pacific region.

Till the end of the year, we plan to increase port capacity from current 4 million tonnes to 7 million tonnes a year. (Inaudible) is down next year, the port capacity will reach 9 million tonnes. And the port will be able to receive Panamax-class vessels with deadweight of up to 60,000 tonnes, which will significantly improve the efficiency of logistics through the port.

Read the rest of this transcript for free on seekingalpha.com

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