Mechel Reports Work Suspension - Analyst Blog
07 Dicembre 2011 - 10:00AM
Zacks
Russian mining company,
Mechel OAO (MTL) announced the suspension of work
at its New-Olzherasskaya Underground mine, which is a part of
Southern Kuzbass OAO, due to coal self-heating in the long
wall.
New-Olzherasskaya Underground mine
was commissioned on September 29, 2006 and produces coal of GZhO
grade. Its coal reserves amount to 3 million tonnes and length is
about 200 meters.
At present, the self-heating center
is being isolated. The entire mine infrastructure – transport,
ventilation system, dewatering, power facilities, drifting faces
and stopes - are in working condition and safe.
Suspension of the mine will not
cause any delay in coal deliveries to customers since there is
enough coal at the New-Olzherasskaya Underground mine warehouse.
Coal from the warehouse together with coal from Olzherasskiy Open
Pit is being washed by Kuzbasskaya Coal Washing Plant and delivered
to the customers. According to the preliminary estimates,
recovering from the accident may take up to 6 months.
Though miners from
New-Olzherasskaya Underground mine take part in recovery works, a
part of the employees were moved to Sibirginskaya mine and
Department for Mining equipment Installation.
Mechel is a leading domestic steel
and coal producer with a strong position in key businesses,
including production of specialty steel and alloys. The company has
the largest coal reserve base in Russia. It is focusing on growth
and cost-cutting measures.
The company owns and controls
essential infrastructure, including ports, rolling stock and power
plants, which provide access to the export markets. However,
Mechel’s large capital-spending program, high debt and substantial
interest burden are matters of concern.
Currently, Mechel has a short-term
(1 to 3 months) Zacks #5 (Strong Sell) rating and a long-term (6
months) Underperform recommendation.
Mechel faces stiff competition from
Arcelor Mittal (MT) and Norilsk Nickel
Mining and Metallurgical Co.
ARCELOR MITTAL (MT): Free Stock Analysis Report
MECHEL OAO ADS (MTL): Free Stock Analysis Report
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