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Evraz to Develop Eastern Coking Coal Field in Russia
10/22/2010 - Evraz Group S.A. has won the tender, held by the Russian State Mineral Resources Agency, to develop the Eastern field of the western part of the Ulug-Khemsky coking coal deposit in East Siberia. The license is expected to be received within two months.
Evraz Group S.A. has won the tender, held by the Russian State Mineral Resources Agency, to develop the Eastern field of the western part of the Ulug-Khemsky coking coal deposit in the Republic of Tyva, East Siberia. The license will cost 850 million roubles (approximately US$28 million) and is expected to be received within two months.
The Eastern field is 800 km to the east of the city of Novokuznetsk, where two Evraz steel mills are located. It borders the Mezhegey coal deposit, for which Evraz won the license in March 2010.
Evraz notes that the Eastern field has high-quality hard coking coal (grade Zh under Russian classification) reserves, including inferred resources of more than 550 million tonnes and out-of-balance reserves of more than 100 million tonnes. The company says it will prepare detailed plans for the development of the field “in due course.”
Additional exploration and project development will take place over roughly the next six years. Mine construction is expected to commence in 2017. Full production capacity is anticipated by 2021.
Alexander Frolov, Evraz’s CEO, said, “The acquisition of the license for the Eastern field is in line with our strategy of enhancing vertical integration into raw materials, and in this case coking coal. This field is adjacent to the Mezhegey coal deposit, and there are significant synergies based on sharing the infrastructure needed to develop these two projects. Development of the Eastern Field will not require substantial capital expenditures until 2017.”
