Mechel Seeks to Buy Raspadskaya Coal Company

Friday, 10 June 2011 14:52

Mechel is in talks over the purchase of the Siberia-based Raspadskaya coal company but is only prepared to pay a third of the sum requested by Raspadskaya shareholders, according to RIA Novosti. The Raspadskaya shareholders value the company at $6 billion while Mechel is ready to pay only $1.8-$2.3 billion for the mine, which has hindered negotiations. Raspadskaya is a good asset but is overpriced considering the difficulties, which the company is currently experiencing and which explain the shareholders’ intention to sell it. Raspadskaya, the largest producer of steelmaking coal in Russia in 2009, had to cut coal output significantly after a series of explosions hit its key mine in west Siberia in May 2010, killing 91 miners.