NEW YORK (TheStreet) -- Mechel OAO (MTL) was gaining 8.5% to $2.04 Friday on news that its subsidiary Mechel Somani Carbon launched a screening facility at coal terminal in Vishakhapatnam on India's east coast.
The new screening facility will let the company sort anthracites from Mechel's coal mining enterprises. The screen facility project capacity is set to handle up to 250,000 tons a year. Mechel plans to seel those 250,000 tons of anthracites in India in 2014, which would make up 20% of the anthracite market in the country.
"The Indian market, where demand for coal continues to grow, is of strategic interest to us," CEO of Mechel Mining Management Company OOO Pavel Shtark said in a press release. "As of now, India annually buys 110 million tonnes of steam coal and 40 million tonnes of coking coal. Experts estimate that by 2020 India will be importing up to 120 million tonnes of coking coal of various grades. Considering the favorable forecasts for the future, Mechel's efforts are aimed not only at building up stable ties directly with all kinds of clients, but also at setting up necessary infrastructure."
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TheStreet Ratings team rates MECHEL OAO as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate MECHEL OAO (MTL) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."