Russian antitrust service threatens action against Evraz, Mechel
Russia's Federal Antimonopoly Service could throw the book at Russian steel producer Evraz Group and mining giant Mechel over their pricing policies, the head of the service said Tuesday.
"Indeed, it [Evraz Group] is a likely candidate," Igor Artemyev said, responding to a question from reporters as to whether the group was in the agency's bad books.
Artemyev had previously warned that Mechel was "not the only candidate for punishmen
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t over monopoly pricing."
Analysts said Tuesday there were no grounds for the antimonopoly service to take action against Evraz.
The company said it exports less than 1% of the coking coal it produces.
Russian Prime Minister Vladimir Putin last week accused Mechel of selling coking coal domestically at double the export price, and ordered the Antimonopoly Service to look into the company's operations.
However, Mechel's share price received a boost on Russian trading floors earlier Tuesday following a statement by a Russian first deputy prime minister.
The RTS price for Mechel shares had risen 10.17% in early trading but by 3:30 p.m. (11:30 a.m. GMT) - a half hour after Igor Shuvalov said Mechel would not be a repeat of the Yukos story - the day's increase was at 18.2%.
"Nothing should be excluded, but this is the least probable scenario," Shuvalov told reporters.
He said the company would most likely cooperate "in good order" with government agencies, and that all outstanding issues would be resolved without any fuss.
Mechel's share price had plunged dramatically in New York and Moscow after Prime Minister Vladimir Putin said Thursday that the company was selling raw materials at twice the price domestically it used abroad. This was coupled with fresh accusations of tax evasion against the company by Putin on Monday.
Russia's top antitrust regulator had planned to consider the charges against Mechel by August 26, but vowed Monday to move more swiftly to calm the markets.
Analysts started comparing Mechel's situation with the story of Yukos, once Russia's largest private oil company but eventually bankrupted over unpaid tax bills.
Evraz Group S.A. is one of the largest vertically integrated steel, mining and vanadium businesses in the world. In 2007, Evraz produced 16.4 million metric tons of crude steel, 12.6 million metric tons of pig iron and 15.2 million metric tons of rolled products.
Its principal assets include three of Russia's leading steel plants: Nizhny Tagil (NTMK) in the Urals region and West Siberian (Zapsib) and Novokuznetsk (NKMK) in Siberia. The company also owns Palini e Bertoli in Italy, Evraz Vitkovice Steel in the Czech Republic, and Evraz Oregon Steel Mills and Claymont Steel in the United States.
The company's mining division in Russia includes the iron ore mining complexes Evrazruda, Kachkanarsky (KGOK) and Vysokogorsky (VGOK) and the coal mining complexes Yuzhkuzbassugol and Raspadskaya, in which Evraz holds a 40% equity interest.
