Mechel Announces Progress in Developing Elga Coking Coal Deposit

Both machinery convoys have already reached their destination – the place of the new open pit mine construction. There will be five equipment and machinery convoys in total. They are expected to deliver all necessary equipment and materials to start construction of the open pit mine and mining operations before April 2010.
Exploration and operational mine site is planned to be commissioned in summer. Construction of the open pit mine would include all necessary stripping works. First coal is expected to be mined already in November 2010.
The machinery packs include various mining and transport machines, including excavators, bulldozers, motor graders, dump trucks, fuel servicing trucks, timber trucks as well as shift camp components. In total, over ninety pieces of special-purpose machinery and large-scale equipment will be supplied for the deposit development.
During the summer a shift camp for 250 people as well as industrial area, fuel and lubricants storage facility and other necessary objects will be built at the open pit construction site. Later a permanent settlement will replace the camp and shift workers arriving to work at the open pit and further development of the deposit will be living there.
Currently 2,400 people (including all shift teams) are employed at the site of railway and mine construction. In summer this figure is expected to reach 6,000. Thus the project is very important for the Far Eastern Federal District social development.
All operations at the first stage of Elga coal deposit construction are implemented by Mechel OAO’s subsidiary Metallurgshachtspectzstroy ZAO.
Vladimir Polin, Senior Vice-President of Mechel OAO, commented, “Development of the Elga coal deposit is known to be a complex and multifaceted project. The construction progress is affected by both weather and geography conditions. Still, we have everything to successfully implement this project – experienced staff, resources as well as new state-of-the-art equipment and cutting-edge technology. Our work is clearly in line with our plans declared before, and we are sure that we’ll manage to commence coal mining at the Elga deposit as early as autumn.
We expect to mine up to 200 thousand tonnes of coal this year and in 2011 we expect to increase this level to 1 million tonnes. This is very important, considering growing demand for high-quality coking coal both within and outside Russia.
Timing of further Elga coal deposit development will depend on market conditions but, still, our main goal is to reach the 27-30 million tonnes of coal production at the deposit. Thus, summing up production volumes of all Mechel’s coking coal production assets, the company will become one of the top three world’s largest producers and suppliers of coking coal concentrates.”