Indebted Russian Mining Giant Delays Staff Salaries – Report

MOSCOW, November 27 (RIA Novosti) – A Russian newspaper reported Wednesday that the country’s largest coking coal producer has delayed paying salaries as it struggles to manage almost $10 billion of debt.

Employees in Mechel’s Moscow office have not received part of their paychecks for this month and were not given a reason for the hold-up, business daily Vedomosti reported.

Like other companies in the Russian metals and mining sector, Mechel is mired in debt as global prices for coking coal continue to slide. The company is currently negotiating with lenders to restructure its debts.

Mechel’s share price has experienced extreme volatility in recent weeks, crashing 41 percent in Moscow trading on November 13. On Monday, Mechel’s stock slid by 19 percent, before rapidly correcting the loss.

The company’s shares had fallen over 7 percent in Moscow by mid-afternoon Wednesday, the Prime news agency reported.

Mechel produces steel as well as mining coking coal and has around 80,000 employees worldwide, according to the company’s website.

Mechel is owned by Igor Zyuzin, a mining tycoon that Forbes Magazine says is worth about $3.1 billion. 

A company spokesperson confirmed to Vedomosti that salaries at Mechel were being delayed, but ascribed the problems to technical difficulties.

Updated with Wednesday’s share price fall

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