Mechel Reports Results of a Meeting with Posco’s ManagementMoscow, Russia – June 21, 2011 - Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, reports the results of a meeting between the management of Mechel and Posco, which include signing of the Framework Project Agreement and the Agreement for Construction of a Permanent Shift Worker Settlement for Elga Coal Complex.
On June 21, during an official meeting between Mechel OAO’s management headed by Chairman of the Board of Directors Igor Zyuzin and the management of South Korean company Posco headed by Chief Executive Officer Chung Joon-Yang, the parties signed two agreements — the Framework Project Agreement and the Agreement on Construction of a Permanent Shift Worker Settlement for Elga Coal Complex.
The Framework Project Agreement was signed by Mechel OAO’s Chairman of the Board of Directors Igor Zyuzin and Posco’s Chief Executive Officer Chung Joon-Yang.
The Framework Project Agreement is a follow-on to the Agreement of Intent, which was signed on November 10, 2010 during the official visit of the President of the Russian Federation Dmitry Medvedev to the Republic of Korea.
The Framework Project Agreement declares that the two sides agreed to strengthen and expand their cooperation to include analysis and implementation of joint projects in the steel industry, mining and logistics by setting up work groups and holding mutual consultations and meetings. One of the document’s points is the construction of a permanent shift worker settlement for Elga Coal Complex, whose implementation was also specified by a separate agreement signed today.
The Agreement on Construction of a Permanent Worker Settlement for Elga Coal Complex was signed by Mechel Mining Management Company OOO and the Posco group’s construction division, Posco A&C. The agreement stipulates creation of the company named Posco Russia to implement the project.
Posco A&C won the tender for design, construction, delivery and assembly of residential, public and amenity spaces for Elga Coal Complex’s permanent shift worker settlement. The tender was held in May 2011.
The permanent shift worker settlement will provide space for 3,000 residents and include a public center and five residential areas. It is due to be completed in June 2013. With a single company responsible for handling the entire construction process, high quality is assured, while reducing financial risks and the risk that the deadlines would not be met.
Mechel OAO has long-standing and stable partnership relations with South Korean consumers, successfully supplying coking coal to this country. Since August 2009 Mechel’s official representative office operates in Seoul.
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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, steel, ferrochrome, ferrosilicon, rolled products, hardware, heat and electric power. Mechel products are marketed domestically and internationally.
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