Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Smiling Medvedev Shows Support for Mechel

APPresidents Dmitry Medvedev and Nursultan Nazarbayev walking before a meeting in Aktobe, Kazakhstan, on Monday.
AKTOBE, Kazakhstan — President Dmitry Medvedev and Igor Zyuzin, CEO of embattled coal and steel producer Mechel, were all smiles Monday at the opening of a $250 million plant.

"There should be more projects like this," Medvedev said cheerfully as Kazakh President Nursultan Nazarbayev watched on.

Medvedev's support on Monday signaled that tensions around Mechel were easing after Prime Minister Vladimir Putin accused Zyuzin of price fixing last summer, causing the New York-listed company to lose half its value and scaring investors away from Russia before Medvedev ordered "authorities" to stop harassing companies.

Zyuzin waited nearly two hours for Medvedev to arrive at an economic forum in Aktobe, a western Kazakh city near the border with Russia, to participate in a video link for the opening ceremony at Mechel's Voskhod Khrom ore processing plant, located about 130 kilometers away in the town of Khromtau. While technical personnel tested the link by repeating, "Dear Mr. President, we are glad to see you here," Zyuzin talked on a cell phone, chewed gum and smiled broadly at journalists, who unsuccessfully tried to get him to talk with them.

In a brief interview earlier in the day, Zyuzin said he was in high spirits. "Everything's OK," he said. About the recent turmoil on the stock market, he said, "I approve of the measures the government has taken to solve the financial crisis."

Putin attacked Zyuzin in July after he failed to show up at an industry meeting because of illness, reviving investors' memories of the crackdown on Yukos that resulted in the state bankrupting the oil company and taking over most of its assets.

In late August, the Federal Anti-Monopoly Service fined Mechel, Russia's biggest coking coal producer, 5 percent of its 2007 coking coal revenues, or about 790 million rubles ($32.2 million), for abusing its dominant market share. The company also has been forced to cut its prices by 15 percent.

While Zyuzin spoke little to journalists and colleagues, ministers who gathered for the Monday forum discussed their plans for getting the market back on track. Russian Railways chief Vladimir Yakunin led Economic Development Minister Elvira Nabiullina to a quiet corner and spoke with her for almost half an hour.

Industry and Trade Minister Viktor Khristenko warmly greeted Zyuzin, while the Transportation Minister Igor Levitin shook his hand in a friendly manner. Zyuzin mostly smiled in response.

Being more talkative than his boss, Mechel chief operating officer Alexei Ivanushkin said the company had invested $250 million into the plant, which will produce 1.3 million tons of chrome ore annually. The ore will be processed on site to make 950,000 tons of chrome concentrate, most of which will be sold on the open market until a ferrochrome smelter is built nearby.

Ivanushkin said the ferrochrome smelter would cost $500 million to $800 million and be able to process as much as 250,000 tons of ferrochrome a year from 2014.

He said Mechel also plans to build a $750 million nickel plant in northern Kazakhstan and a $600 million nickel plant in the Orenburg region, both of which will open in 2013 and produce 20,000 tons of nickel per year.