Mechel Commences Construction of Coal Transshipment Complex at Vanino Port

Mechel announces that it has launched the initial project stages to construct a specialized coal transshipment complex at Vanino Port (Vanino SCTC), Khabarovsk reg., Russia.

The specialized coal transshipment complex at Vanino SCTC is an integral part of the Neryungrinsky and Elga coal deposits development project. Construction of the complex is being managed by Mecheltrans OOO, the transportation and logistics subsidiary of Mechel. Vanino SCTC will be operated and maintained by Mechel Vanino OOO. This project is conducted with the assistance and close cooperation of the Khabarovsk Krai government.

The first stage of the terminal, with a capacity of 15.0 mln tn, is scheduled for opening in 2012, while commissioning of the second stage, which will raise the capacity to 25.0 mln tn, is scheduled for 2015. The project is estimated at RUR12.0 bln (about $500 mln).

The design and construction works for Vanino SCTC are being performed concurrently with the Company’s Elga field development and Elga-Ulak railway construction. With a total length of 315 km, construction of the Elga-Ulak railway is currently underway to connect the Elga field with the Baykal-Amur railroad, in keeping with the current Elga project. The railway is scheduled to open for permanent operation by September 2010.

The complex at Vanino SCTC will establish railways construction, stations for unloading rail cars, a coal storage warehouse, a conveyor track system, a two sided pier and ship-loading machines, a major control unit, and other operational infrastructure.

Coal from the port will be exported to countries in the Asia-Pacific Region on marine bulk carriers with a maximum dead weight capacity up to 150 thousand tn.

Mechel Management OOO Chief Executive Officer Vladimir Polin commented, “Construction of the complex at Vanino Port and the implementation of other transportation projects will establish one of the largest transportation hubs in the Far East, supporting the strategic interests of the Russian transportation and commodities markets in the Asia-Pacific Region and significantly contributing to the economic development of the Vanino District and the Far East region. Construction of the Vanino SCTC will provide significant tax gains to the Khabarovsk Krai and the Vanino District budgets, create of over 600 new jobs, and develop the social infrastructure of that region. Within the first stage of the Vanino SCTC construction, Mecheltrans OOO, in collaboration with the Administration of the Vanino District, is currently developing a training program for future specialists and participating as an investor in the construction of two residential blocks in the Vanino urban settlement.”