Mechel Cuts Full-Year Coal Output, Capital Spending Forecasts
Mechel lowered its production target to 28 million metric tons of coal from a previous estimate of 31 million tons, Vice President Oleg Korzhov said today on a conference call. Capital spending for 2011 was cut 22 percent to $1.8 billion, he said.
The Moscow-based company suspended output at its Sibirginsk mine in June after detecting higher-than-normal gas levels. Mechel earlier halted its New-Olzherassk project, also on safety concerns. Both mines are operated by its Southern Kuzbass unit.
Output of coking coal concentrate will be 14.5 million tons this year as previously forecast, Mechel said today.
The producer agreed on a waiver with creditors to allow its ratio of net debt to earnings before interest, tax, depreciation and amortization to reach 3.5, the company also said in a presentation. In September, Mechel delayed a plan to sell shares in its mining unit because of volatile markets.
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