KOMSOMOLSK-ON-AMUR, Russia, Oct. 24, 2013 (GLOBE NEWSWIRE) -- Mechel OAO (NYSE:MTL) , one of the leading Russian mining and metals companies , announces that an agreement between Vnesheconombank and Mechel on allocating the first tranche of the project financing for Elga Coal Complex's first stage totalling 2.5 billion US dollars, was signed in the presence of the Russian Federation's Prime Minister Dmitry Medvedev.
The agreement for the 150-million-dollar tranche was signed by Vnesheconombank's Chairman Vladimir Dmitriyev and Chairman of Mechel OAO's Board of Directors Igor Zyuzin on the sidelines of the session of the government committee on the Far East's social and economic development, in the presence of Russian Prime Minister Dmitry Medvedev.
"Currently development of the rich Elga deposit is a priority for Mechel. We are grateful to our country's leaders for their attention and support for such an important project. Vnesheconombank's financing will give a powerful stimulus not only to our efforts on completing construction of Elga Coal Complex's first stage, but also to the social and economic development of the Republic of Sakha (Yakutia) and the Far East as a whole. The project's implementation will create over 5,000 jobs. I am sure that thanks to the state's support, we will successfully continue our work on creating a new industrial cluster in this region," Chairman of Mechel OAO's Board of Directors Igor Zyuzin noted.The deal granting Mechel OAO project financing totaling 2.5 billion US dollars for the development of Elga Coal Complex's first stage was approved by Vnesheconombank's Supervisory Board in September 2013. The loan has a tenor of 13.5 years with a grace period until 2017. According to the transaction's conditions, Vnesheconombank's funds will be used to complete construction of Elga Coal Complex's first stage. The first stage includes construction of a railroad and a mining and washing complex with an annual capacity of 11.7 million tonnes of run-of-mine coal by 2017.