Russian mining and metals company Mechel PAO has extended a year-long contract to continue supplying coal to South Korean trader STX.
Under the terms of the contract extension, Mechel will further provide STX with up to one million tonne (Mt) of products until December next year.
These products include coking and thermal coal produced by Mechel subsidiaries Yakutugol Holding and Southern Kuzbass Coal.
Mechel noted that the price will be determined based on the market conditions.
Mechel PAO CEO Oleg Korzhov said: “The coal market has begun recover after a difficult first half of the year. As several think-tanks have foretold, as demand is getting stronger, prices for coking coal (key product for Mechel’s mining division) may go up by a quarter in the next year and a half.
“In this sense, 2021 will be indicative. By signing this agreement, we have begun preparing for the next year in advance, as the current situation calls for flexibility in one’s sales policy and offering one’s partners mutually acceptable cooperation aiming for a long-term outlook.”
The Russian firm has shipped about 800,000t of coal to STX as per the existing contract over the past year.
In March 2017, Mechel deployed new mining excavators at Yakutugol Holding Company’s Neryungrinsky open-pit project in Russia.