Mechel OAO, Russian mining and metals company, signed a memorandum of understanding with China’s steelmaking major Baosteel Resources Corporation, for an increase of coal supplies to 1.4Mt of coking coal a year.
According to the memorandum, Mechel will supply Baosteel Resources with up to 1.4Mt of coking coal. The agreement will be valid from April 2015 through March 2016, with a possibility of further prolongation. Prices will be determined on a monthly basis.
Photo courtesy of Mechel OAO
The memorandum also provides for a possibility of supplying Baosteel with other Mechel products, such as PCI and steam coal, as well as cooperation in other areas, including the possibility of collaboration with the economic development institutes in Russia and China.
Mechel is fully meeting its obligations according to the earlier contract, which provides for supplies of 1.2Mt of coking coal a year. Since April 2014 through December, over 1Mt of coking coal was shipped to Baosteel enterprises in China’s eastern and southern provinces, which accounts for 10% of Mechel’s coal exports to Asia Pacific.