Evraz wins licence to develop Meshegey coal deposit

Evraz Group won the tender to develop Meshegey coal deposit in the Republik Tyva, Russia. Evraz offered rub 950 ml (approximately $32ml) in tender held by Rusian State Mineral Resouces Agency. The relevant licence is expected to be received within months, reported the press-service.
The Meshegey coal deposit is located 800 km east of Novokuznetsk in the central part of the Republic Tyva, East Siberia It is a world class coking coal deposit with estimated category A+B+C1 reserves of 213.5 million tonnes of hard coking coal (grade Zh under Russian classification). Detailed plans for the development of the Mezhegey deposit will be prepared in due course.
The deposit was put for the tender in December 2009 the second time. The first time it was put for the tender in 2008 with starting price rub 200 ml. Than Yushkusbassugol (structure of Evraz Group) was declared as a winner. It offered 16,940 bl. However the company refused to develope the deposit because of the downturn in demand for coal due to world downturn.
Alexander Frolov, Evraz’s CEO, said: “The development of the Mezhegey coal deposit is a strategic investment aimed at covering the needs of Evraz’s steelmaking facilities for high quality hard coking coal after the depletion of existing Zh-grade coal reserves. Evraz will also benefit from production and sales of additional volumes to the market. Due to the long-term nature of the project, it will not require substantial capital expenditures over the next two years which is in line with our conservative cash management policy”.