MOSCOW, June 8 /PRNewswire/ --
Mechel OAO (NYSE: MTL) today announced an agreement with Danieli to provide for the modernization of Mechel's steel operations. The agreement follows a meeting between Mechel's Chief Executive Officer Igor Zyuzin and Danieli's Chairman and CEO Gianpietro Benedetti.
The new agreement was signed during a visit of a delegation of specialists from Danieli, Italy to Mechel OAO. The meeting was attended by Danieli's Chairman and CEO Gianpietro Benedetti as well as executives from Mechel including Chief Executive Officer Igor Zyuzin, Mechel Management OOO CEO Vladimir Polin, and the management of Chelyabinsk Metallurgical Plant (CMP), Mechel's major steel producing subsidiary.
The agreement between Mechel and Danieli, a leading world technological developer and manufacturer of equipment for metallurgical production, will include the re-equipment of CMP's electric arc furnace No. 6 with fundamental modernization of its continuous caster to multiply its productivity by 3.5-4 times, to 1.2 million tonnes of slabs annually, commissioning of a ladle furnace and a vacuum vessel. Implementation of the project will allow Mechel to increase its output including stainless and construction steel products with concurrent improvement of quality and reduction of production costs. Also under consideration is the joint work in reconstruction of the steel melting and rolling production.
Mechel and Danieli have had a longstanding collaboration, which has included projects for two continuous casting machines of one million tonnes capacity each, successfully commissioned over the last three years. These units are among the major facilities included in the technical re-equipment program of Mechel's subsidiaries. Their startup was performed in line with the implementation of the strategic objective of putting Mechel's steel melting mostly on continuous casting technology with the view to improve Mechel's steel segment performance.
"Mechel's long-term technical re-equipment program is based on state-of-the-art technologies in the field of steel production. We are confident that collaboration with world leading equipment engineering companies such as Danieli will enable Mechel to achieve its strategic objectives set to improve the performance of its steel segment by implementing modern technologies for steel melting and casting, as well as modernizing its rolling production and finishing," - Mechel Management OOO CEO Vladimir Polin commented.
Mechel is one of the leading Russian mining and metals companies. Mechel unites producers of coal, iron ore, nickel, steel, rolled products, and hardware. Mechel products are marketed domestically and internationally.
Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Mechel, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements. We refer you to the documents Mechel files from time to time with the U.S. Securities and Exchange Commission, including our Form 20-F. These documents contain and identify important factors, including those contained in the section captioned "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" in our Form 20-F, that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of our recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or ADRs, financial risk management and the impact of general business and global economic conditions.
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