OREANDA-NEWS. April 14, 2014. Mechel (NYSE: MTL), one of the leading Russian mining and metals companies, announces that its contract with China’s steelmaking major Baosteel Resources corporation, which provides for an increase of coal supplies to 1.2 million tonnes of coking coal a year, has been prolonged.

According to the memorandum signed at Baosteel Resources’ Shanghai headquarters, Mechel Carbon Singapore will supply Baosteel Resources with up to 1.2 million tonnes of coking coal. The agreement will be valid from April 2014 through March 2015, with a possibility of further prolongation. Prices will be determined on a monthly basis. Mechel Carbon Singapore has fully met its obligations according to the earlier contract, having shipped a total of 960,000 tonnes of coking coal to Baosteel enterprises in China’s eastern and southern provinces. As part of last year’s agreement, Mechel Carbon Singapore also made test shipments of PCI coals, as well as steam coal from the Elga deposit.

Thanks to the new agreement, Baosteel Resources will account for up to 10% of Mechel’s coal exports to Asia Pacific.

“Baosteel Resources remains a key strategic partner for Mechel. The agreement is proof that both we and our Chinese partners aim for long-term cooperation based on transparency and mutual profit. Moreover, the Chinese side voiced interest in additional shipments of various grades of coal. This signed agreement is in line with the new program for the development of Russia’s coal industry until 2030, which calls for an increase of exports to promising Asian markets,” Mechel Mining Management Company Chief Executive Officer Pavel Shtark noted.