Mechel Signs Memorandum of Intent with Minmetals
OREANDA-NEWS. On October 28, 2008 Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announced that it has signed a Memorandum of Intent with Minmetals, one of China’s largest state industrial corporations, reported the press-centre of Mechel.
On October 28, 2008, at the Third Russian-Chinese Economic Forum in Moscow, with Vice-Prime Minister of the Russian Federation Alexander Zhukov in attendance, a number of commercial bilateral agreements were signed. One of the aforementioned agreements was the Memorandum of Intent between Mechel OAO and Minmetals, a Chinese-based state mining, metallurgical, construction, and investment corporation. The Memorandum was signed by Igor Zyuzin, Chief Executive Officer of Mechel OAO, and Zhang Yuanrong, Vice President of Minmetals.
The purpose of the Memorandum of Intent is to establish a long-term mutually advantageous partnership to realize Mechel’s key projects for the reconstruction of operating infrastructure and the construction of new infrastructure of federal importance. For example, construction of the rail and structural steel mill at Chelyabinsk Metallurgical Plant OAO, is in-line with the agreement with RZhD OAO, and building of a new coal mining complex at Elga deposit – the largest undeveloped coal deposit, is also in-line with the federal concept of Russia's Far East region development.
Founded in 1950, China’s Minmetals Corporation is a state owned metallurgical and mining company ranked 11th among the 500 largest businesses of the Chinese People's Republic. It implements the strategy of investing in various sectors with the view of establishing a full production cycle.
“Today, the importance of a close economical partnership with the Asian-Pacific region on an international level can not be understated. An example of this is the Third Russian-Chinese Economical Forum, which is currently being held in Moscow. Since 1998, the commodity circulation volume between Russia and China has risen ten-fold while relations between Russian and Chinese partners have strengthened.
Within this kind of cooperation Mechel OAO and Minmetals Corporation signed the Memorandum for long-term partnership. Mechel will continue to implement and develop its strategy for its production and infrastructure assets. As a vertically integrated company, Mechel will continue to produce high value-added downstream products while using the most modern technologies,” Mechel Management OOO Chief Executive Officer Vladimir Polin noted.
“Minmetals Corporation is one of the leading Chinese state corporations with positive, broad experience in the construction of metallurgical plants and engineering of mining plants worldwide. For Minmetals, signing of the Memorandum is their first experience with a Russian company, while Mechel gains an additional reliable and professional partner to aid in its effective production,” Mr. Polin added.