OREANDA-NEWS. Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announces that Vnesheconombank's (VEB) Supervisory Board approved financing totaling 2.5 billion US dollars for the development of Elga Coal Complex (Republic of Sakha (Yakutia))'s first stage.

The terms of the financing call for Vnesheconombank's funds to be used to complete the first phase of the Elga deposit's development project. The first stage includes construction of a railroad and a mining and washing complex with an annual capacity of 11.7 million tonnes of run-of-mine coal by 2017. The project's implementation will create over 5,000 new jobs.

The loan has a tenor of 13.5 years with a grace period until 2017. Vnesheconombank's representatives will also have the right to two out of five seats on Elgaugol OOO's Board of Directors.

“Over five years, we invested over two billion dollars into this project - constructing a 321-kilometer railroad from the Baikal-Amur Mainline to the deposit, infrastructure, a temporary workers' settlement and a washing plant.

“Now with the help of Vnesheconombank's funds we will be able to complete construction of the first phase and more quickly reach design capacity of coking coal production. Mechel has everything it needs to deliver this coal to its customers - including its own wagon fleet, port facilities in the Far East, long-term contracts with major international steelmakers.

“We are creating from scratch an industrial cluster that will become the basis for the whole region's economic growth. We are grateful to the state for its support in these difficult times and are certain of this project's success,” Chairman of Mechel OAO's Board of Directors Igor Zyuzin noted.