MOSCOW, Nov. 28, 2013 (GLOBE NEWSWIRE) -- Mechel OAO (NYSE:MTL), one of the leading Russian mining and metals companies , announces that Elgaugol OOO project company has received the 150-million-dollar first tranche of the project financing for Elga Coal Complex's first stage totalling 2.5 billion US dollars from Vnesheconombank.
Currently development of the rich Elga deposit is a key investment project for Mechel. Receiving these funds enables the company to continue working on this project regardless of market volatility and attain planned results as scheduled. "The quality of Elga's coals and Elga's geographic location make this project one of the most efficient in the world," Chairman of Mechel OAO's Board of Directors Igor Zyuzin said.
"It is through financing such important projects that the economy of Far East and Eastern Siberia should develop. This project is a key one for the region in the sense of economic effect," Vnesheconombank's First Deputy Chairman and member of the Board Andrey Sapelin said.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. It 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. Editorial note: State Corporation "Bank for Development and Foreign Economic Affairs (Vnesheconombank)" was established in 2007 through a transformation of Bank for Foreign Economic Affairs of the USSR. Vnesheconombank operates in conformity with Federal Law dated May 17, 2007 "On Bank for Development". The Memorandum on Financial Policies approved by Resolution of the Government of the Russian Federation dated July 27, 2007 sets forth major business lines and indicators of the Bank's performance. Vnesheconombank is one of the key instruments for implementing the state economic policy aimed at removing infrastructure restrictions that impede economic growth, enhancing efficient utilization of natural resources, developing high-tech industries, unleashing innovative and industrial potential of small- and medium-sized enterprises (SMEs) and ensuring support for exports of industrial goods and services. The Elga coal deposit is Russia's largest and one of the world's largest deposits of high-quality coking coal, and is located in Southern Yakutia. Its reserves total some 2.2 billion tonnes according to JORC standards. Mechel is one of the leading Russian companies. 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.