Mining

Mechel’s mining segment comprises facilities producing and selling coking coal concentrate, iron ore concentrate and coke, which are chief raw materials for production of steel and steam coal. Apart from providing for the needs of our steel and power segments, we sell significant volumes of raw materials to third-party consumers.
Mechel is a leading Russian coking coal producer as well as one of the world’s major coking coal concentrate producers. The Group controls 25% of Russia’s coking coal washing facilities. In 2019 the company produced 18.8 million tonnes of coal.

The segment’s priority investment project is the development of Elga Coal Complex. Elga’s JORC reserves of high-quality coking coal grades, which are in high demand internationally, amount to approximately 2.2 billion tonnes. After Elga Open Pit was commissioned and tracks were laid along the 321-kilometer Ulak-Elga railroad linking Elga Coal Complex with Baikal-Amur Mainline, Mechel went ahead with the next stage – launching a washing plant in October 2012. Elga Coal Complex’s first stage includes construction of a mining facility with an annual capacity of 11.7 million tonnes of run-of-mine coal.

In summer 2011 and spring 2012, the company acquired subsoil licenses for iron ore mining at the Pionerskoye and the Sivaglinskoye deposits in the Sutamskaya area, located in the Republic of Sakha (Yakutia)’s Neryungri region. The total estimated reserves of the two deposits’ reserves exceed 163 million tonnes of iron ore, while the Sutamskaya area’s forecast reserves are estimated at 1.35 billion tonnes of iron ore, under the Russian standards.

Mechel’s mining segment includes

• Southern Kuzbas

  Southern Kuzbass Coal Company was formed in 1993 as several mining and processing enterprises joined forces. The company produces coking and steam coals, and comprises enterprises with many years of glorious history, many awards, well-developed infrastructure and highly proficient employees.
  
  Total amount of coal so far mined by the company’s enterprises is 325 million tonnes. Southern Kuzbass Coal Company’s products are in high demand both in Russia and abroad. The company undergoes large-scale reconstruction and modernization, implementing superior technologies. Over the years, Southern Kuzbass Coal Company managed to create a united, strong, competitive company which makes a major contribution to the economy of both region and country.
  
  As of January 1, 2020, in-situ reserves are estimated at about 1.8 billion tonnes. The project capacity of the company’s assets, including underground and open pit mining, totals 18 million tonnes annually, while washing capacity totals 17 million tonnes.
  
  The company comprises:
  • Underground Mining Department
    (Sibirginsk Underground, New-Olzherassk Underground, Lenin Underground)
    
    
  • Open Mining Department
    (Krasnogorsk Open Pit, Sibirginsk Open Pit, Olzherassk Open Pit)
    
    
  • Coal Washing and Processing Department
    (Sibir Processing Plant, Kuzbass Processing Plant, Tomusinsk Processing Plant, Krasnogorsk Processing Plant)
    
    
  • Tomusinsky Motor Transport Department

• Yakutugol

  Yakutugol AO is one of Russia’s largest coal companies. It comprises three mining enterprises – the Nerungrinsk Open Pit, the Kangalassk Open Pit and the Dzhebariki-Khaya Open Pit.
  
  Yakutugol AO is one of Russia’s few hard coking coal producers. Mostly it mines high-quality K9-grade coal. Yakutugol produce is in high demand both domestically and internationally. The coking coal concentrate produced there is shipped to steel and chemical-recovery enterprises in central Russia as well as exported to Pacific Asia and Ukraine. The company also sells steam coal to energy, cement and housing and communal enterprises in Russia's Far East.
  
  Yakutugol is one of Far East’s largest mining companies and an undisputed leader of the industry in the Republic of Sakha (Yakutia). In 2007 Mechel Group acquired the controlling stake in Yakutugol together with the license to develop the Elga coal deposit. As of January 1, 2020 Yakutugol had coal reserves totaling 177 million tonnes.

• Elgaugol

  Elga is one of the world’s largest deposits of high-quality coking coal. Elga’s JORC reserves amount to approximately 2.2 billion tonnes. Elga is located in south-eastern Yakutia, some 415 kilometers east of Neryungri. The deposit’s reserves lie in thick, up to 17 meters, low-angle seams with low-thickness capping.
  
  Mining at the deposit was launched in 2011. In the same year transport began at the 321-kilometer railway built by Mechel, which links the deposit with Baikal-Amur Mainline. This is Russia’s only private project of such scale in the transport sphere.
  
  
  
  The Elga coalfield allows open-cut mining, which is much cheaper, safer and more efficient than underground mining as it can be conducted by high-capacity excavators. On the Russian metallurgical coal market, Elga’s coals are rare and valuable. The deposit contains high-volatile, highly fluid coals with low sulphur, nitrogen and phosphorus content and high calorific value.
  
  The Elga project's first phase includes construction of a mining facility with an annual capacity of 11.7 million tonnes of coal. In June 2016, Mechel closed the deal on selling 49% share in the Elga coking coal deposit development project to Gazprombank AO.
  
  

• Korshunov Mining Plant

  Korshunov Mining Plant PAO is Eastern Siberia’s only industrial complex producing and dressing iron ore. Its mining assets include two quarries — the Korshunov and the Rudnogorsk quarries. Korshunov Mining Plant has Russia’s Federal Agency for Mineral Resources’ sub-soil license for working the Korshunov iron ore deposit “up to 840 meters deep”. Mineral reserves on this new license are estimated at 500 million tonnes.
  
  Korshunov’s iron ore concentrate is one of Russia’s best – it has very low slag-making levels, it melts well, has no poison, and naturally includes all additives required for steelmaking. Korshunov Mining Plant is located in close proximity to the Baikal-Amur Mainline, which is in turn linked with the Trans-Siberian Railway. The plant’s iron ore concentrate is transported by rail to Russian and foreign steelmakers.
  
  In 2019, Korshunov Mining Plant produced 2.5 million tonnes of iron ore concentrate. The plant’s chief customers are Russian and foreign steelmakers, predominantly from China.

• Moscow Coke and Gas Plant

  Moscow Coke and Gas Plant’s base in central Russia provides it with an advantageous geographic location and easy access to stable consumer markets, which make the plant one of Moscow Region’s best enterprises.
  
  All the coke the plant produces is meant for metallurgical use and is successfully marketed both domestically and internationally. The enterprise’s production capacity is currently set at 1.1 million tonnes of gross coke a year with 6% humidity.

• Mechel-Coke

  Chelyabinsk Coke and Chemical Products Plant (Mechel Coke) is a by-product coke plant with over 10 shops and departments. Its primary product is metallurgical coke, manufactured in eight coke-oven batteries. Mechel Coke supplies the needs of Mechel enterprises as well as markets its products domestically and internationally.
  
  The coke it produces is of very high quality, characterized by uniformity in humidity and solidity, low sulphur and ash content, low volatility. Mechel Coke uses associated gas to produce 24 types of chemical products, including benzene, toluene, solvent, naphthalene, ammonia sulfate, resins and many others. They are all used to manufacture plastic, synthetic fiber, medicine, perfume and fine chemical products in Russia and abroad.

The mining segment’s enterprises
are consolidated in Mechel Mining company

In 2019 Mechel’s enterprises sold 7.2 million tonnes of coking coal concentrate, 1.4 million tonnes of PCI, 736 thousand tonnes of anthracites, 5.2 million tonnes of thermal coal, 2.6 million tonnes of iron ore concentrate and 2.5 million tonnes of coke.