MMK to lose least due to Raspadskaya accident

Experts claim that, among all the metallurgical enterprises, Magnitogorsk Iron & Steel Works (MMK) will suffer the smallest losses occasioned by the lack of coal supplies from Raspadskaya mine.

Now the media recently quoted Governor of Kemerov Region Aman Tuleyev as saying that it would take at least a year to restore Raspadskaya mine after the two methane explosions on May 9, 2010. According to the experts’ preliminary estimates, the cost of restoring the above-ground infrastructure will come to 700 million RUR, while it will cost another 5 billion RUR to deal with the underground damage.

Bank of Moscow’s analysts say Raspadskaya’s key mine is responsible for 65% to 70% of all the coal produced by Raspadskaya copper company (the business also owns a smaller MUK96 mine and an open cut).

Kapital, an investment and finance business, reports the drop in coal output might badly affect the mine’s key customers, that is, Novolipetsk Iron & Steel Works (NLMK) and Evraz Group. These companies buy 14% and 13%, respectively, of all the coal produced at Raspadskaya mine.

‘We do not think it improbable that these enterprises might be faced with some steel production stoppages because of the shrinking coal supplies,’ analysts predict.

At the same time, MMK is likely to suffer the least, largely because the enterprise bought Belon Coal Company well in advance. MMK’s representatives agree with this expert opinion.

‘The accident at Raspadskaya is not going to have an impact on MMK’s day-to-day operations, head of MMK’s press service Evgeniy Kovtunov informed RIA Novosti. He explained Belon would provide securely for the enterprise’s raw materials.

MMK’s emergency cushion is sure to work even though it was at Raspadskaya where the rarest rich coals were produced. The thing is, Belon manufactures these rare coal kinds as well.

MMK BOD Chairman Viktor Rashnikov said during his recent visit to Turkey that the coal consumption in Russia grew stable and even decreased a bit, which was why Raspadskaya’s shrinking coal outputs would not become a problem for MMK.


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