Russia’s Raspadskaya Pledges to Maintain Supply

23 May 2010 (Last Updated May 23rd, 2010 18:30)

Troubled Russian miner OAO Raspadskaya pledged to maintain supplies to six domestic clients after it declared force-majeure last week following a mine accident which killed 90 people at its biggest mine. Steelmaking raw material will be supplied to two units of Evraz Group SA, Russia's se

Troubled Russian miner OAO Raspadskaya pledged to maintain supplies to six domestic clients after it declared force-majeure last week following a mine accident which killed 90 people at its biggest mine.

Steelmaking raw material will be supplied to two units of Evraz Group SA, Russia's second-largest producer, and one unit owned by OAO Mechel and OAO Magnitogorsk Iron & Steel among others.

On 19 May Raspadskaya declared force-majeure, allowing it to stop or drop volumes under contracts without paying fines due to unavoidable circumstances.

The explosions that rocked Russia's biggest underground mine may halt the coking coal producer's plans to export the steelmaking raw material to Asia as prices soar.

Russian Deputy Prime Minister Igor Sechin asked producers to reduce exports to satisfy the needs of local steelmakers.

The Raspadskaya underground mine, which produces nine million metric tons of coal a year, will cost $160m and more than a year to rebuild, according to CEO Gennady Kozovoy.