Chinese Minmetals demands $130 mln from Mechel

Mechel of Igor Zyuzin, which is finaling restructuring loans for billions of dollars, may be forced to pay up to $130 million to Chinese Minmetals Engineering, which built a rolling mill at Chelyabinsk metallurgical plant (ChMK). Minmetals requires through the Stockholm arbitration ChMK to pay the work, the plant filed a counterclaim for $68 million for the failure of deadlines and poor quality of the work. The amount of the claim can be sensitive to Mechel, but the proceedings will take a long time, experts say.

Chinese Minmetals Engineering Co. Ltd is, the contractor in the construction of the universal rolling mill at ChMK of Mechel, has requires $128.4 million from the plant through the Stockholm arbitration (SCC), the Mechel 20F report informs. The amount of the claim in the Russian report is more - about $136 million. The Minmetals’ main claims relate to payment for the work ($46 million) and the reimbursement of expenses for the change in the technical project ($87 million), the documents inform. ChMK, according to the 20F, filed a counterclaim for $68.4 million, requiring the payment of a fine for the delay and compensation for damage due to the poor quality of the work (in the Russian report - $56 million). In addition, ChMK challenged the candidacy of the judge from Minmetals, the Chinese were to provide the court with arguments on the issue by May 31. Mechel and SCC yesterday declined to comment, it failed to contact Minmetals. The report of Mechel states that the company "considers possible the outflow of resources" because of the Minmetals’ claims.

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