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. Last Updated: 07/27/2016

Mechel Turns to Coal, Nickel

Mechel on Thursday earmarked $2.7 billion for spending on coal and nickel operations to buoy sales as it slips outside the ranks of the country's top five steelmakers.

The money will be spent through 2011 to upgrade equipment and expand production, the firm said. Mechel plans to boost annual coal output by 45 percent to 25 million tons and nickel by 67 percent to 24,000 tons within five years.

"Our new investment program will support the next phase of the company's growth," chief operating officer Alexei Ivanushkin said in a statement. It will help Mechel "increase profitability and enter new markets."

Mechel is increasing its focus on coal and nickel after prices for the raw materials rose to records and as steel production stalls. The company's steel output rose 1 percent to 5.95 million tons last year, the slowest rate of growth among Russia's top seven steelmakers.

Mechel also will add 2.2 million tons of rolled-steel and so-called long-steel products by the end of the decade, Igor Zyuzin, owner and CEO, said Thursday in a conference call.