A report by Platts states that Russian mining company Mechel has agreed to supply 1Mt of metallurgical coal to JFE Steel Corporation of Japan.

The coal, including washed coal from the Elga coal deposit and material from the Yakutugol Holding Company OAO, will carry market prices. The agreement will be in force until August 2018.

Mechel supplies other Japanese steelmaking corporations but considers its three-year agreement with JFE as an important step towards implementing its strategy of diversifying its sales and strengthening links with steelmakers in the Asia Pacific region.

In January this year, Mechel signed a 1.44Mt/yr contract with Chinese steelmaker Baosteel.

According to Platts, semi-hard coal from Elga can only be shipped during the summer as coal processing is only possible during the warmer months.

Pavel Shtark, Mechel’s CEO, said that the JFE contract was the first long-term agreement with a Japanese company.