The agreement also provides for a possibility of supplying Baosteel with other Mechel products, such as “Long-term export contracts are particularly important for us in the period of FX volatility as they provide Mechel with stable foreign currency revenue. We are currently exporting over 70% of our mining division’s products,” Mechel OAO’s Chief Executive Officer Oleg Korzhov said.
The agreement also opens other opportunities for Mechel to supply Baosteel with different coals, such as PCI and steam coal, as well as cooperation in other areas, including the possibility of collaboration with the economic development institutes in Russia and China.
Mechel is fully meeting its prior obligations under a separate contract, which calls for 1.2 million mtpy of coking coal. Between April and December 2014, over 1 million mt of coking coal was shipped” and “to the Asia-Pacific region.