Mechel JSC announced its acquisition of 100% share in VtorResource Ltd., a Chelyabinsk secondary metal reprocessing firm. The acquisition was made through Mechel-Service Ltd., Mechel’s subsidiary.

VtorResource Ltd. carries out the full operating cycle of secondary metal collecting and reprocessing works. Its acquisition price is about $6m.

According to Mechel PR-department, the consolidation of VtorResource Ltd. into Mechel holding is directed at reducing dependency of Chelyabinsk integrated metallurgical complex and Izhstal works on the secondary metal market supply. In 2005, VtorResource Ltd. collected 178,000 tons of scrap metal. At the moment, a modernization program aimed at increasing the production output is being developed. The company owns 8 warehouses collecting scrap metal.

In 2005, the joint scrap metal consumption of Chelyabinsk integrated metallurgical complex and Izhstal works amounted to 2.6m tons including 1.1m tons of domestic scrap metal. Hence, the instability of the secondary metal market motivated Mechel’s efforts to intensify control over the secondary metal supplies to its subsidiaries.