Russia Metals and Mining

"UC Rusal" gets a reprieve.

~~The company will continue negotiations on refinancing of its loans to mid-summer.
"UC Rusal" froze payments on syndicated loans of $ 5.15 billion for the three months until July 7th. Thus, the aluminum company received additional time for negotiations to refinance these loans with the transfer of payments for at least two years. At this point almost all lenders have agreed to the terms of refinancing, except the Chinese China Development Bank and one of the investment funds.
At the end of last year "UC Rusal" received a loss of $ 3.2 billion; on Wednesday it announced the freezing of payments on syndicated loans until July 7th. According to the report, the company published on the website of the Hong Kong Stock Exchange, the freeze mode, which the company is able to resort to during the negotiations on the terms of the refinancing, came into effect on April 8th. At the moment, "UC Rusal" has two syndicated loans - pre-export financing (PXF) for $ 4.75 billion and a loan of $ 400 million. PXF in two tranches on current conditions is repaid in two stages - in 2016 and 2018, a loan of $ 400 million - in 2018. $ 3.68 billion is left to repay on both loans.
As "UC Rusal" remembers the crisis.
In 2013 "Rusal"’s loss was $ 3.2 billion, of which $ 2 billion were paid to write-off of investment projects and the costs of closure of inefficient plants. The company expects the best performance in 2014, but the analysts say it will largely depend on the new LME rules and the convertion of rate not lower than 35 rubles for $ 1.

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Evraz operates without profit the second year in a row

In 2013, Evraz made a loss in the amount of $572 million because of bad market conditions. The company plans to reduce capital investments, to decrease costs and not to pay regular dividends till 2016 at least to remedy the situation. Last year was difficult for all companies in ferrous metallurgy, but some competitors of Evraz were profitable in spite of this.
Evraz of Roman Abramovich, Alexander Abramov and Alexander Frolov (together they have 67.13%) disclosed its financial accounting under IAS today. On the results of 2013, the company proved to be unprofitable - $572 million (against the loss in the amount of $425 million in 2012). The proceeds of Evraz fell by 2.1% to $14.4 billion and EBITDA by 10.2% to $1.8 billion (the EBITDA margin reduced by 12%). Other steel-smelting and mining companies in the country, which reported their results for the previous year, also significantly deteriorated their performances, but made the profit: Severstal made $83 million, NLMK - $189 million and Metalloinvest - $1.08 billion. However, Mechel, which, as analysts expect, will show the loss (in the first 9 months of 2013, the loss was $2.2 billion), and MMK haven’t disclosed their results yet.
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MMK to declare losses in the amount of $2-3 billion under IAS for 2013

According to deputy general director of the MMK Group Sergei Sulimov, the company expects to make losses under IAS by results of 2013.
As Sergei Sulimov reported to journalists, without nonmonetary retirements in the amount of $2-3 billion, the MMK Group would register a small net profit.

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Severstal increases production of special steel

In 2013, Cherepovets metallurgical plant (CherMK) increased production of special steel by 21% as compared with 2012.

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Lysva metal company presents its production results for Q1 2014

The company increased the production of rolled steel with protective cover by 32.6%, painted steel by 50.2% and reduced the production of galvanized steel for car items by 12.4% due to the decline in car production by the national companies. Production of metal items increased due to realization of the program for the improvement of the current activity of the plant because of the extended .

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In 2013, Evraz increased net loss by one third to $572 million

Evraz has made public its preliminary audited financial results for 2013. The net loss increased by 34.6% to $572 million, and loss per stock increased by 16.7% to $0.35. The consolidated revenue reduced by 2.1% to $14.411 billion. EBITDA fell by 10.2% to $1.821 billion. Steel items sales increased by 1% to 15.5 million tons, and coking coal production increased by 22% to 18.9 million tons.

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Alrosa will restart the work of its representative office in Dubai

In H2, Alrosa is going to restart the work of its subsidiary ARCOS East in Dubai that was stopped in 2009. Alrosa and Dubai Diamond Exchange, DDE have closed the memorandum about mutual understanding aimed at the improving of the cooperation of Alrosa and the diamond union of the UAE. Within the agreement closed, Alrosa promised to open the representative office closed in 2009, with the help of ARCOS East.

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What will happen to Donbass, If it leaves the Ukraine?

~~Its fate may be sadder than the fate of the fully subsidized Crimea.
 
 
Subsidies and subventions
The Donetsk and Lugansk regions are the most industrialized regions of the Ukraine, they were called “industrial heartland" the country for many years. But the state budget for 2013 suggests the opposite.
According to the Investgazeta, in the first six months of the 2013th the Donetsk region received 13.09 billion hryvnias of allocations, grants and subsidies from the treasury, and paid only 3.85 billion to it. A similar situation is with the Lugansk region - it received 9.42 billion from the state budget, and paid only 4.35 billion hryvnias to it. I.e., the total deflict of the two regions was over 14 billion - excluding Kiev, this is the worst performance in the Ukraine.
But the absolute numbers are not very demonstrative, they don’t take into account the size of the regions. A comparison of the budget balance per capita is more clear and correct in this situation. But even in this case, the Lugansk and Donetsk are unprofitable.
A lot of expensive coal
Donbass is a mining region. The Ukraine has  more than 60 million tons of coal production per year. Most of this fuel is  from the mines of Donbass.
About 70 % of solid fuels, mined in the Ukraine is thermal coal. It is used as a fuel for the thermal power plants. There are 5 power plants in the Donetsk and Lugansk regions

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What will happen with Donbass, if it goes from the Ukraine?

The Donetsk and Lugansk regions are the most industrialized regions of the Ukraine, they were called “nursing" the country for many years. But the state budget for 2013 suggests the opposite.
According to the Investgazeta, in the first six months of the 2013th the Donetsk region received 13.09 billion hryvnias of allocations, grants and subsidies from the treasury, and paid only 3.85 billion to it. A similar situation is with the Lugansk region - it received 9.42 billion from the state budget, and paid only 4.35 billion hryvnias to it. I.e., the total surplus of the two regions was over 14 billion - excluding Kiev, this is the worst performance in the Ukraine.
But absolute numbers are not very demonstrative, they don’t take into account the size of the regions. Comparison of the budget balance per capita is more clearly and correctly in this situation. But even in this case, the Lugansk and Donetsk are unprofitable.

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Russian aluminum exports drop and go down in value.

In January-February 2014 the Russian aluminum exports amounted to 399 thousand tons, which is 21.3 % less than in 2013 (506.8 thousand tons), the Federal Customs Service of Russia states.
The value of the supplies was $ 786.4 million against $ 1.002 million a year earlier.
The aluminum exports into the non-CIS countries amounts to 386.7 thousand tons, into the CIS countries - 12.3 thousand tons.

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