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[Ferro-Alloys.com]Mechel OAO, one of the leading Russian mining and metals companies, reports halting production at Southern Urals Nickel Plant OAO.

 

Considering persistent negative trends on global nickel market and unfavorable forecasts for its recovery in the foreseeable future, the plant's Board of Directors decided to halt production at the plant for the long term and to prepare its equipment for a long-term shutdown in order to minimize the plant's losses. All requisite procedures set forth by the Russian Federation's law will be observed.

 

Southern Urals Nickel Plant OAO will provide its laid-off employees not only those measures required by the labor law and the collective labor agreement, but also guarantees set by the multilateral agreement between the Orenburg Region's government, Orsk's city administration, Mechel OAO and the plant's management and trade union. In particular, the plant's employees will be offered up to 1,500 jobs at Mechel Group's enterprises, including its newest production facilities that are currently being commissioned. The document was signed with the participation of the Russian Industry and Trade Ministry's workgroup.

 

"The decision to halt production was dictated by a long period of negative financial results caused by the current situation on the nickel market, and aimed at minimizing losses. In this situation we are forced to react to this economic challenge and act in the best interests of all of Mechel OAO's shareholders. It must be noted that Southern Urals Nickel Plant OAO is planned for divestment according to the asset restructuring program earlier approved by the company's Board of Directors, and we continue to actively seek investors. All of the plant's equipment will be properly prepared for a long-term shutdown, so that the new owner would be able to resume production in acceptable time and with minimal loss," Mechel OAO's Chief Executive Officer Evgeny Mikhel commented on the decision made by the plant's Board of Directors.