Russian coal miner and steelmaker Mechel continues to expand its Asia Pacific coal sales with the signing of a long-term coking coal supply agreement with China's Jiangsu Sha Steel, the miner tells Kallanish.

The contract is for the supply of 720,000 tonnes of premium-grade coking coal produced by Mechel's Yakutugol coal mining and processing arm from September 2019 to August 2020. The coal will be shipped from Mechel's Port Posiet in Russia’s Far East and the buyer may additionally purchase Mechel's thermal coal if needed, Mechel says.

Mechel and Jiangsu Sha Steel have been in strategic longstanding cooperation for a number of years. The agreement supports Mechel's planning of production activity, and consolidates its position as a leading coking coal exporter, says Mechel deputy chief executive Pavel Shtark.

The company was supplying premium-grade coking coal to China's Baosteel until June 2019, and will have shipped 1.5 million tonnes of coal concentrate and PCI to Japan's JFE Steel by June 2021 (see Kallanish passim).

Mechel's further expansion in the Asia Pacific market is in line with the expected 25% coal mining volumes increase to up to 25mt this year. This comes after sales declined in 2018 on the back of a rail wagon shortage and technical issues at mines. Sales to the region provided around 40% of Mechel’s revenue in 2018.