Igor Zyuzin, who also has the largest financial interest in Mechel, said he planned to list at least 20% of the mining company in an initial public offering. He did not say when or on which bourse the proposed listing would occur.
New York-listed Mechel, Russia’s sixth-largest steel maker, has a market capitalization of $15.8 billion. Much of the company’s future growth is premised on the development of large coal fields in eastern Russia, as well as record coal prices.
“We intend to spin off separate companies, including our mining assets. I don’t rule out that there will be companies spun off in the near future,” Zyuzin told reporters.
“We value the mining assets of the company at no less than $20 billion,” he said.
Mechel’s mining assets include the Yuzhny Kuzbass Coal Co and the Korshunov iron ore mine in Siberia. The company also paid over $2 billion at an auction last year to acquire control of assets in the eastern Russian region of Yakutia.
It plans to boost output at Yakutugol by at least a third and to invest $3 billion over the next seven to 10 years bringing the huge Elga coal field, potentially Russia’s largest, into production.
Mechel Vice-President Mukhamet Tsikanov said the company was also considering listing its metallurgical and energy assets separately. He did not say when, or how much, the company planned to raise.
Mechel, which plans to invest $2.7 billion upgrading its existing assets by 2011, owns steel plants in Russia and Romania as well as a nickel plant and a ferro-alloy plant in Siberia. (Reuters)
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