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Mechel renews 960,000-tonne coking coal supply deal with Baosteel

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Mechel renews 960,000-tonne coking coal supply deal with Baosteel

MechelOAO, the troubled Russian coal and steel producer, agreed to renewa deal to supply nearly 1 million tonnes of coking coal over the next year toChina's Baosteel Resources, a subsidiary of Baosteel Group Corp., the Russian company said March 31.

Under the deal, Mechel will supply 960,000 tonnes ofpremium-grade coking coal from its Neryungrinsky mine in southern Yakutia, inRussia's Far East.

It will supply the agreed volumes between April 2016 andMarch 2017 via Mechel's Posiet port, according to the statement.

Mechel CEO Oleg Korzhov said: "Baosteel Resourcesaccounts, on average, for 30% of our coal exports to China; that has alwaysbeen a priority market for us."

Mechel, which had net debt of US$6.49 billion as of the endof September 2015, according to data from S&P Capital IQ, has beensailing close tobankruptcy for the past few years.

It reached agreement with major creditors over debt restructuringearlier this year, but minority shareholders failed to approve the deal in a vote staged in Moscow onMarch 4.

A second vote has been scheduled for May 26.

S&P Capital IQ andS&P Global Market Intelligence are owned by McGraw Hill Financial Inc.