OREANDA-NEWS. On July 15, 2009 Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announced H1 2009 operations results, reported the press-centre of Mechel.

Vladimir Polin, senior vice-president of Mechel OAO, made comments on corporate H1 2009 operations results: “First quarter of 2009 was rather challenging for Mechel as well as for the whole mining and steel industry. However, starting from the second quarter we observe certain positive dynamics in the markets of steel products we produce. Active development of own sales network and expanding our sales geography allowed us to provide our plants with off-take orders. We commissioned all production units suspended at our facilities in fourth quarter of 2008. Steel and ferroalloys segments’ capacity utilization reached pre-crisis levels and at some plants was even higher. I would like to note that Mechel became the first Russian steelmaker that started to recover coke production during crisis. We continue to produce most downstream products increasing the share of high value added products in our portfolio while reducing billets production, which can be observed in our second quarter results. Due to introduction of anti-crisis measures in the second quarter we posted production growth almost in all steel segment’ products.

In mining division in view of decreased demand for coking coal especially in the domestic market we concentrated most of our efforts on finding new customers particularly in Asia. As a result we signed a number of large scale long-term contracts with Chinese, Japanese and South Korean companies, which allowed us to increase utilization of coking coal mining capacity in the second quarter setting the base for its restoration to pre-crisis levels. Certain increase in both Russian and Chinese production of steel products favored as well increased iron ore concentrate production.

In ferroalloys division recovery of ferronickel and ferrochrome prices could be observed from the end of first quarter that allowed us to increase capacity utilization of our ferroalloy assets to 100% and to significantly raise output of these ferroalloys. We also reoriented Tikhvin plant to consume our own high quality chrome concentrate. Its productions will be gradually scaled up as mining volumes of our Voskhod mining and processing plant (Kazakhstan) grow.

In power division as a result of combined activities for costs reduction, lowering the amount of fuel consumption, and utilizing synergies of our vertical integration we were able to minimize decline in electricity generation demonstrating better than Russian-average results

In general, taking into account the emerging tendencies we have a positive outlook for the second half of 2009 and intend to continue our activities in order to increase production tapping new market niches and increasing the company’s share in the markets we specialize at.”