Mechel is one of the leading Russian companies. Its business includes three segments: mining, steel, and power. Mechel unites producers of coal, iron ore concentrate, nickel, steel, rolled products, hardware, heat and electric power. Mechel products are marketed domestically and internationally.

Business and Operations

Mechel produces ~15 million tonnes of coking coal and around 11 million tonnes of steam coal annually; as well as close to 4.7 mt of iron ore concentrate and approx. 6 million tonnes of steel per annum (mostly long steel products such as bar and rod). The company is the largest Russian producer of special steel (i.e. stainless and other alloy grades) supplying some 39% of Russian steel output of specialty steel grades.

The company has production sites scattered across:

  • Russia - including the Chelyabinsk Metallurgical Plant (2.8 mt integrated steel capacity for long products; approx. 24,000 employees), Izhstal (600kt of electric arc furnace steelmaking and rolling of long products) and the Beloretsk Metallurgical Plant (which produces ~535kt of wire rod and drawn wire products). In Russia, Mechel also has ferroalloy production facilities that include the Southern Urals Nickel Plant in Orsk; the Bratsk Ferroalloy Plant in Bratsk; and the Tikhvin Smelting Plant in Tikhvin. Iron ore mining facilities in Russia include the Zheleznogorsk-Ilimsky mine, in Irkutsk Oblast.
  • Romania - several facilities include Mechel Targoviste (output of ~450 kt carbon and special steels per annum), Campia Turzii (approx. 300kt long products), Ductil Steel Buzau (around 300 kt of steel rod and wire) and the Otelu Rosu Steelmaking Plant.
  • Lithuania - the Nemunas plant producing steel wire, and drawn wire products such as fasteners and netting.
  • USA - Mechel Bluestone, a West Virginia based producer of high quality coking coal (with some 725 million tonnes of coal reserves).
  • Other important operations include the Southern Kuzbass Coal Company and Yakutugol in Yakutia (both in Russia).
  • Other sites across Central and Eastern Europe, including the Voskhod Mining Plant in Kazakhstan and the Rousse power plant in Bulgaria.

From the foregoing, the company is perhaps best described as an important mining and metallurgy business - being both a leading supplier of metallurgical coke and ferroalloys and an important supplier of specialty and other steels; and a firm that is strategically advantaged by its control of important steelmaking raw materials including iron ore, coking coal and steam coal.

The busines is majority-owned by the CEO Igor Zyuzin, but a proportion of the company's shares are traded on the NYSE.

Russian Anti Monopoly Committee Investigation

The company has recently come under fire from the Russian government due to Anti-Trust and Tax Evasion Concerns. Russian Prime Minister Putin has been very vocal about Mechel's foreign vs domestic sales. The deadline for the Russian Anti-Monopoly Committee's decision is August 26th, but most expect it earlier[1]

On August 13th 2008, the Federal Anti Monopoly Service gave its ruling. The Russian Service will insist on a 30 percent reduction in domestic coking coal prices, and a fine of 7 percent to 8 percent of revenue. Coking coal accounts for about 8% of Mechel's revenue and the fine will cost Mechel about 300 million dollars according to Goldman Sachs analyst Vasily Nikolaev.


  1. Mechel- Let's get greedy- Domenic Strazzulla’s Stock Blog
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki