Russian steel and mining company Mechel has extended its previously signed coal supply agreement with China-based Baosteel Resources.
The company will supply up to 960,000t of premium-grade coking coal produced at Neryungrinsky Open Pit to Baosteel from April 2016 through to March 2017.
Most of the coal is planned to be shipped through Mechel's own Trade Port Posiet.
Mechel CEO Oleg Korzhov said: "We have established constructive ties with Baosteel Resources.
"We supply our partners with high-quality coking coal which has long become a trademark of Yakutia and all of Russia's Far East.
"Baosteel Resources accounts on average for 30% of our coal exports to China, that has always been a priority market for us."
Mechel signed a memorandum of understanding (MoU) in January 2015 to provide increased coal supply to Baosteel.
Under the terms of the MoU, the company supplied up to 1.4 million tonnes of coking coal, PCI and steam coal to Baosteel.
Mechel said that over one million tonnes of coking coal was shipped to Baosteel in China's eastern and southern provinces since April 2014 through December 2014.
"Long-term export contracts are particularly important for us in the period of FX volatility as they provide Mechel with stable foreign currency revenue," Korzhov said.
Image: Mechel supplied up to 1.4 million tonnes of coking coal, PCI and steam coal to Baosteel. Photo: courtesy of SOMMAI/FreeDigitalPhotos.net.