Zheleznogorsk-Ilimskiy, Russia – November 13, 2007 – Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announces that its iron ore mining subsidiary, Korshunov Mining Plant OAO, received new high-tech equipment including a bridge grabbing transshipment crane for its concentration plant and a Liebherr excavator for its Rudnogorsk mine.
Installation of the bridge grabbing crane with 16-tonne lifting capacity is being completed at the plant’s concentration facilities. The new crane will be used to transship iron ore concentrate from storage to conveyor and deliver iron ore concentrate to a drying and shipment section. Commissioning of this unit will enable the plant to significantly reduce costs and enhance the smoothness of iron ore concentrate shipments. The total cost of the project including the equipment installation is over RUR15.0 million (more than US$610.0 thousand).
Rudnogorsk open pit mine of Korshunov Mining Plant received a Liebherr excavator with a bucket capacity of 15.3 cubic meters. The excavator’s productivity exceeds almost twice that of any excavator currently operating at the Korshunov Mining Plant. The excavator is diesel hydraulic, therefore it can operate without the need for high-voltage power lines following technological explosions. The excavator will be used to mine rock from upper horizons of the open pit mine and costs over RUR116.0 million (more than US$4.7 million).
The commissioning of the new mining equipment is in line with Mechel’s long term technical re-equipment program for its subsidiaries operating in its mining segment, in which Mechel plans to invest approximately US$1.2 billion during the next five years. The commissioning of the equipment is aimed at improving the segment’s performance and will allow Mechel to significantly reduce production costs, increase productivity, and improve working conditions for miners.
“Mechel’s technical re-equipment program for iron ore concentrate production enables the plant to maintain iron ore mining volumes at a level of 5.0 million tonnes, which is in line with the Korshunov Mining Plant’s production capacity, while reducing iron ore mining and concentrating costs. We plan to continue the modernization of mining and transportation equipment at the plant and in line with Mechel’s plans for 2007 to 2011, approximately US$90.0 is expected to be invested in the development of the Korshunov Mining Plant,” Mechel Management OOO Chief Executive Officer Vladimir Polin said.
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