Blog Exposure - Russian Mining and Metals Company Mechel PAO Signs Long-Term Coal Supply Agreement with China's Jidong Cement
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LONDON, UK / ACCESSWIRE / December 22, 2017 / Active-Investors.com has just released a free report on Mechel PAO (NYSE: MTL). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=MTL. On December 20, 2017, the Company announced that is has signed a memorandum with China's Jidong Cement for the long-term supply of coal. The financial details of the transaction have not been disclosed by any of the concerned companies. Register today and get access to over 1000 Free Research Reports by joining our site below:
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Details of the supply agreement
As per the terms of the Memorandum, Mechel has agreed to supply approximately three million tonnes of steam coal to Jidong Cement within one year. The coal for this contract will be mined from the Elgaugol OOO's Elga Open Pit and Yakutugol Holding Company AO's Neryungrinsky Open Pit. The price of the coal supplied will be calculated monthly and will be determined based on index rates. This will be finalized after further negotiations between the two companies.
Yakutugol AO is one of Russia's largest coal Companies. It comprises of three mining enterprises – the Nerungrinsk Open Pit, the Kangalassk Open Pit, and the Dzhebariki-Khaya Open Pit. Mechel had acquired controlling stake in the Company in 2007. Elga is one of the world's largest deposits of high-quality coking coal. Mechel has controlling 51% stake in this mining facility.
Commenting on the signing of the long-term coal supply agreement, Oleg Korzhov, CEO of Mechel PAO, said:
"Jidong Cement is our longstanding and strategic partner in Asia, and we aim to continue our long-term and mutually profitable partnership. Mechel's mining division has met all its obligations on our prior agreement. Today, Jidong Cement is the chief foreign consumer of Elga's steam coal."
History between two Companies
China is an important market in Asia for Mechel's mining business. Mechel has been supplying coal to Jidong for the last couple of years and has become an important client from Asia. It had signed an agreement with Jidong in June 2015 for the supply of 1 million tonnes of steam coal. In December 2016, Mechel signed a year-long agreement with Jidong for the supply of two to three million tonnes of steam coal. This agreement is ending in December 2017.
About Mechel PAO
Founded in 2003, Moscow, Russia-based Mechel is one of the world's leading mining and metals companies. Mechel is comprised of more than 20 production units, producing coal, iron ore, steel, rolled products, ferroalloys, heat and electric power. All the Group's units work within a single production chain – from raw materials to high value-added products. The Company also owns three trade ports, transport operators, and international sales and service networks. The Company's products are marketed across Europe, Asia, North, and South America, Africa. The Company reported annual revenues of 276 billion roubles in FY16.
About Jidong Cement
Jidong Cement or Jangshan Jidong Cement Co., Ltd, is one of the top cement producers in the world. It has grown into a largescale building material conglomerate and manufactures a wide range of products including cement, dry mortar, cement additives, grinding aids for cement and new building materials. The Company is famous for its “Dunshui” brand of low alkali portland cement. The Company not only sells its products all over China but also supplies to other Southeast Asian countries.
Stock Performance Snapshot
December 21, 2017 - At Thursday's closing bell, Mechel PAO's stock dropped 6.77%, ending the trading session at $4.13.
Volume traded for the day: 860.92 thousand shares, which was above the 3-month average volume of 226.10 thousand shares.
After yesterday's close, Mechel PAO's market cap was at $1.20 billion.
Price to Earnings (P/E) ratio was at 3.96.
The stock is part of the Basic Materials sector, categorized under the Steel & Iron industry. This sector was up 1.5% at the end of the session.
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