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Evraz Renounces Mezhegey Coal License

01/20/2009 - Evraz Group renounces its right to purchase the license to develop the Mezhegey coal deposit in the Republic of Tyva, Russia, with estimated reserves of some 213.5 million tonnes of hard coking coals.

Evraz Group SA has renounced its right to purchase the license to develop the Mezhegey coal deposit in the Republic of Tyva, Russia. The company said its decision is based on the continuing global financial and economic downturn and weakening coal market conditions.
 
Evraz won the tender to develop the Mezhegey coal deposit in July 2008, having offered 16.9 billion roubles for the license. The Mezhegey coal deposit has estimated reserves of some 213.5 million tonnes of hard coking coals, with mining scheduled to begin in 2014.
 
Evraz said that in the future, it intends to seek further development of its own coal resources, particularly for hard coking coal, based on the existing licenses and coal production facilities located in the Kuzbass region of Russia. The company’s coal resources in this location are situated near the company’s steel mills.
 
The company’s Yuzhkuzbassugol coal company—its biggest coal-producing entity and the main supplier of coal to the company’s steelmaking facilities—represents total proved and probable coal resources of some 1.6 billion tonnes, including 1 billion tonnes of hard coking coal, as estimated by an international consulting firm.
 
Evraz mined 14 million tonnes of coal in 2008, including 9.1 million tonnes of coking coal, with Yuzhkuzbassugol accounting for 13 million tonnes and 8.4 million tonnes, respectively. At the current level consumption level, Evraz’s mining division is capable of fully satisfying the demand for coal from the company’s steelmaking operations.