"We hope we will agree with Romania's government, and these enterprises will be profitable," Alexei Ivanushkin told journalists.
He said the main problem with Mechel's two Romanian enterprises was that they employed too many personnel, and given that Romanian wages are higher, the enterprises can hardly be kept profitable.
Ivanushkin said Mechel should cut personnel to increase the profitability of the plants, but could not yet do so as it is bound by the terms of an agreement to privatize the enterprises.
"In talks with the government, we want to find a solution that will satisfy both us and them," he said. "If a solution suitable to Mechel is not found, the company can consider other possibilities, including the possible sale of these assets."
Ivanushkin said Mechel will announce its decision on the development of its Romanian plants in September or October.
Established in 2003, Mechel is also Russia's second rolled steel producer, and has a 39% share of the special steel produced in Russia.
Mechel unites producers of coal, ore, nickel, steel, rolled steel and highly processed steel products for the domestic and foreign markets.
It has several metal plants in Russia, Romania and Lithuania.
In 2005, the company's output totaled 15.6 mln tons of coal, 5.9 mln tons of steel, and 4.6 mln tons of rolled metal.
Mechel is included in the Russian Industrial Leaders Index RUXX, a composite economic index of 20 Russian companies with financial instruments traded on bourses, including the New York Stock Exchange, the London Stock Exchange, Nasdaq and AMEX.
