Onexim Buys Siberian Coking Coal Miner

Kolmar Deals Gives Access to 400mn Tonnes

Russian coal miner, Intergeo, controlled by billionaire tycoon Mikhail Prokhorov's Onexim, has bought Siberian coking coal producer, Kolmar. No details have been given of the financial details of the deal, or the vendor.

"It is a great acquisition which will allow us to diversify the portfolio of assets," Intergeo's president, Maxim Finsky, said in a statement on Wednesday.

"High-quality coking coal is in good demand on the market right now and the upward pricing trend has only begun," he added.

Kolmar has reserves of over 400 million tonnes of coal in Southern Yakutia.

Chelyabinsk Zinc Increases Investment Programme

Group To Make RUB180 mln Stock Write-Down

Russia’s Chelyabinsk Zinc Plant says that in 2010 it will increase its investment programme by RUB 111 mln ($3.75 mln) to a total of RUB 622 mln ($21 mln)(excluding subsidiaries).

The additional funds will be invested in eliminating bottlenecks in the company’s technical process and will providing total production capacity of at least 160,000 tonnes of saleable SHG zinc in 2011.

The Group also revealed that a stock take in October 2009 revealed a shortage of zinc concentrate and zinc cake and it estimates that its 2009 IFRS Financial Statements will include an inventory write-down of approximately RUB 180 mln ($6.1 million).

Evraz Reports USD1.25 Billion Loss

Russian Steel Makers May Sell Two Siberian Mines

Russian steel producer Evraz reported a net loss for 2009 of $1.25 billion compared with a net profit of $1.78 billion in 2008, Chief Executive Officer Alexander Frolov said on Wednesday. Revenues were down 52.1% to $9.772 billion. Total debt fell to $7.923 billion.

Mr Frolov said the results reflect the fall in construction and infrastructure projects throughout the world; however he was optimistic about Evraz’s prospects for 2010 on the back of increased demand from Asia. Total debt fell to $7.923 billion.

Commenting on the results, Chief financial officer Giacomo Baizini said: "Our net loss of $1,261m for 2009 reflects the global softness of steel markets.

"However it should be noted that in the absence of the effect of the revaluation of certain asset classes due to the change in accounting policy under IAS16, the net loss would have amounted to US$207 million.

"This change resulted in additional depreciation of $558m (net of income tax effect of $148m) due to higher asset values, a loss from the revaluation deficit of $420m (net of income tax effect of $144m) recognised on the date of revaluation, and an additional impairment loss on goodwill of $76m (nil income tax effect)."

China To Finance =Russian Iron Ore Projects

The Russian miner Petropavlovsk PLC, previously known as Peter Hambro Mining, on Tuesday, has signed a cooperation framework agreement with two Chinese companies for the co-financing and development of two of its iron ore projects: Kimkan and Sutara (K&S) and Garinskoye in Russia's Far East.

Petropavlovsk has agreed an indicative loan term-sheet with Industrial and Commercial Bank of China (ICBC) for the financing of Stage 1 of the K&S iron ore project, and has also entered into a cooperation framework agreement jointly with China National Electric Equipment Corporation (CNEEC) and ICBC for the former to act as engineering, procurement and construction contractors and the latter to act as finance providers, for the development of the K&S and Garinskoye projects.

The ten-year loan, which would constitute 85 percent of the total amount of the proposed cost of the contract for the construction of the mining and beneficiation plant and thermal power station, is currently estimated at about $400 million, with an upper limit of $500 million for the inclusion of other possible items.

Russia's Iron Ore Concentrate Production Rises 37 Per Cent

Figures released by Russia’s state statistics service showed that the country produced 37 per cent more iron ore concentrate in the first two months of 2010 than in the same period last year. Production was 14.7 million tonnes in January and February.

Coal output in the same period increased by 17 per cent to 53.8 million tons while metallurgical coke output stood at 4.5 million tons, up 40 per cent.

Norilsk Makes Offer For Soviet-Era Copper Stockpile

Norilsk Nickel, Russia’s largest mining company, has offered to process copper stockpiled during the Soviet era as it struggles to meet demand from its own supplies. Norilsk doesn’t keep stockpiles of its own.

Deputy Chief Executive Officer Oleg Pivovarchuk said that the company has made what he described as “a serious offer” to Rosreserve, the government agency overseeing the inventory although it isn’t clear if the offer is to buy the metal or process it. Approval may be given in the next couple of months.

Norilsk will mix stockpiled copper, which contains other metals such as nickel and cobalt, along with its own, lower-grade copper. Last year Norilsk produced 402,000mt of copper.

Belon To Cease Exports To Supply Parent Co

Russian coal miner Belon Group has said that it will stop exporting production so that it can increase supplies to its parent company, Magnitogorsk Iron and Steel Works.

Belon has sufficient capacity to meet about 70 percent of Magnitogorsk's annual coking coal requirements.

In 2010, Belon expects to mine 5.11 million tonnes of coking coal and 3.10 million tonnes of steam coal. Belon aims also to increase the coking coal processing volume at its Belovskaya enrichment plant to 6.18 million tonnes this year.

According to Belon's investment program, by 2013 the company's coal output will increase to 9.79 million tonnes, including 6.79 million tonnes of coking coal, while its processing capacity will rise to 7 million tonnes of coking coal per year.

Last year Magnitogorsk Iron and Steel Works, doubled its stake in Belon to 82.6 percent in order to secure stable supplies of coking coal for its steel mill near the Ural mountains.

Evraz Wins Siberian Coalfield For A Second Time

Russian steelmaker, Evraz Group SA, has agreed to buy a coal-mining licence at a price of just 6 per cent of the winning bid for the same deposit two years ago.
In 2008 Evraz agreed to pay 17 billion roubles for the Mezhegey coal field in Siberia’s Tyva region, however the company withdrew its offer due to the economic crisis. Today the company announced that it is to pay just 950 million rubles ($32 million) for the same coal-field. Mezhegey is situated 800 km east of the city of Novokuznetska and contains 214 million metric tons of coking coal (Russian grade Zh) used in steelmaking.

"The development of the Mezhegei 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," Chief Executive Alexander Frolov said in a statement.

Chek-Su.VK Signs Agreement For Manganese Processing Plant

Russian mining and smelting company CHEK-SU.VK has signed an agreement to build a manganese ore processing plant in the Krasnoyarsk Region of Russia.

Supplies of ore from deposits in the Kemerovo Region will be transported to the plant via Khakassia to be processed.

The project's total value is estimated at RUB 22 billion and will be completed in 2013.

The agreement was signed at the Krasnoyarsk Economic Forum which opened on Friday. Around 1000 representatives of government agencies and business have gathered at the forum to discuss issues of modernisation.

Raspadakaya Hikes Coking Coal Price

Russian coking coal producer Raspadskaya has announced that its domestic buyers will now have to pay $110 a tonne for its products, a rise of some 22% over prices in the fourth quarter of 2009. The price rise comes in defiance of the country’s anti-monopoly body, the FAS, which last week warned against co-ordinated price rises citing reports of increases in the order of 30-40%.

Russian broker Uralsib suggested in a note that prices could rise again in April. Uralsib also suggested that Mechel, another of Russia’s leading coal miners, is looking to charge its Russian customers $110-120 per tonne for its Kuzbass coking coal and that Mechel’s export price to Asian buyers for coal from Yakutugol in the Sakha Republic is now as much as $205 per tonne.

Norilsk Expects To Report Profits Of $2 Billion

Vladimir Strzhalkovsky, chief executive of Russia’s Norilsk Nickel, said on Friday that the company expects to report net profit of about $2 billion in 2009, which has allowed it to pay down debts of $1.25 billion.

According to the transcript of a meeting between Mr Strzhalkovsky and Russian Prime Minister Vladimir Putin, Norilsk will invest $2 billion into its Russian plants although no timescale has been given. Norilsk increased salaries for its employees by 10 percent from 1 January.

In a separate development Norilsk has forecast increased nickel production of as much as 9 percent with output estimated at between 299,000 and 309,000 metric tonnes compared with 282,900 in 2009.

Copper output in 2010 is expected to fall to 393,000 to 398,000 metric tonnes, down from 402,000 tonnes last year.

Palladium output will be little changed at 2.73 to 2.805 million ounces, and platinum will fall 5 percent to 690,000 to 695,000 ounces.

Norilsk is the world's biggest nickel and palladium producer.

Two Bids For Mezhegei

Severstal and Evraz Group have both bid for the Mezhegei coking coal deposit in the Tuva region, Vedomosti said, citing unidentified people in the industry.

The Federal Subsoil Resources Use Agency will on March 2 award the license for the deposit, which contains as much as 214 million metric tons of coal, it said Wednesday.

Source: Moscow Times

Belon To Increase Coking Coal Production by 44 Per Cent

In 2010 Russia's Magnitogorsk Iron and Steel Works plans to increase coking coal production at its Belon enterprises by 44%.

In October 2009 MMK completed a transaction on consolidation of 82.6% of Belon, one of the biggest Russian coal producers stake. Almost at the same time Belon received from the Russian government state guarantees for USD 3.7 billion line of credit.

At the end of October Mr V Rashnikov chairman of Board of Directors MMK met with Mr A Tuleev governor of the Kemerovo region to discuss not only future prospects of the coal company, but also current situation in the coal industry of the region and raw materials supplied to MMK.

Capital costs at Belon enterprises in 2010 will reach about USD 110 million.

Source: Steel Guru

MMK Signs Coking Coal Supply Agreement

Russian steel mill Magnitogorsk Iron and Steel Works has announced the signing of a five-year coking coal supply agreement with local coal preparation plants Anzherskaya, Koksovaya, Ziminka and Krasnogorskaya.

According to the agreement, in the 2010 to 2014 period MMK will receive supplies of up to 3.5 million tonnes of high quality coking coal concentrate per year from the plants in question, which will fully meet the needs of the steelmaker. The financial details of the agreement have not been disclosed.

The guaranteed deliveries of quality coking coal will enable MMK to continue the implementation of its measures to improve economic efficiency, also through the reduction of coke consumption in the production of pig iron.

Thus, the inclusion in charges of coal concentrate produced at the abovementioned coal preparation plants is expected to significantly improve the quality of metallurgical coke.

Source: Steel Guru

Russian Steel Output Down In October

According to the data released by the Russian Federation Federal State Statistics Service, metallurgical production in Russia in October 2009 down by 0.1% YoY while in the January to October period a drop of 19.3 YoY.

In October Russia crude steel production up by 14.6% YoY to 5.5 million tonnes increased by 3.5% MoM. In October, Russia produced 4.1 million tonnes of pig iron and blast furnace ferroalloys up by 21%YoY and 3.1% MoM, 4.5 million tonnes of billets up by 24.3%YoY and down by 0.2%MoM, 2.6 million tonnes of long products up by 13.9%YoY and up by 2.9 MoM and 2.1 million tonnes of flat rolled products up by 33.9%YoY and down 2.2%MoM. The above flat rolled production figure includes 700,000 tonnes of cold rolled up by 13.9%YoY, and 1.4 million tonnes of hot rolled up by 47.1%YoY.

In October 2009 Russia produced 548,000 tonnes of rolled products from low alloyed steel down by 22.1%YoY, 303,000 tonnes of coated sheet and tinplate down by 5.7% YoY, 61,900 tonnes of cold rolled steel strip up by 30.6% YoY, 64,700 tonnes of bent steel sections down by 11.7% YoY and 27,500 tonnes of wire rod down by 21.7% YoY.

Source: Steel Guru

Evraz Buys 90% Stake In Vanadium-Tula

Interfax reportsthat the Russian Federal Antimonopoly Service has allowed the Evraz Group's Nizhny Tagil Iron & Steel Works to acquire 90.84% in OJSC Vanadium-Tula setting a number of requirements.

The Ukraine Antimonopoly Committee in June this year allowed the Cyprus based Evraz Group member Mastercroft Limited to acquire over 50% in Vanadium-Tula.

Mr Alexei Agureyev vice president for PR of Evraz said "The deal has not yet been done. LLC Sibmetinvest and NTMK filed the request with the FAS to acquire 90.84% of Vanadium-Tula in September 2009. The FAS granted the request on November 2nd. The law allocates one year from the date permission has been received to complete the transaction."

He said the regulator's approval was needed because Vanadium-Tula was one of the biggest ferrovanadium and Nitrovan vanadium producers.

Vanadium-Tula is one of world's leading producers of vanadium compounds. Siberian Mining and Metallurgical Company bought the plant from OJSC Koks a member of the Industrial metallurgical Holding, at the end of 2007. The plant used slag supplied by Evraz steel mills as feedstock.

Sources: Steel Guru, Interfax

Norilsk, BHP TO Mine Coking Coal In Russia

Norilsk Nickel plans to start mining coking coal in Russia together with BHP Billiton from 2015, a senior Norilsk official said on Friday.

The two companies would mine the Syradasai deposit in Russia's Arctic, about 100 km (63 miles) from the port of Dikson on the Kara Sea, Nikolai Matyushenko, Norilsk's deputy director for production development, told reporters.

'From 2015, we intend to mine 8 million tonnes and then to increase it to between 12 million and 15 million tonnes (a year),' Matyushenko said on the sidelines of a conference.

Source: Reuters

Neyland Granted Laos Zinc, Tin Permission

Russia's Neyland Joint Stock Co has been granted permission to survey for tin and zinc ore in the south-eastern Lao province of Attapeu, state media reported Wednesday.

Under an agreement signed on Monday, the Russian company has the right to conduct land surveys in an area of 165 square kilometres in the Xaysethha district to estimate the extent of tin and zinc reserves, the Vientiane Times said.

The company was granted five years to conduct land surveys and collect data on the extent of mineral reserves in the district.

Neyland is the third Russian company to invest in mining in Laos.

Laos, one of the world's few remaining communist countries, was a member of the Soviet Bloc prior to the Soviet Union's collapse in the late-1980s.

Source: Deutsche Presse Agentur via Monsters and Critics

Indo-Russia Titanium Project Under Threat

The Indo-Russian initiative for a Rs 2000-crore titanium project in Orissa has been pushed into deeper uncertainty as two sparring partners of the project, the Kolkata-based Saraf Agencies and the Russian promoters, have failed to reach any settlement on land allotment and share holding

The impasse continues despite a tripartite meeting involving the Orissa government, Saraf Agencies and the Russian promoters held on Tuesday and subsequent two rounds of meeting between the joint venture partners to sort out the differences.

“There has been no breakthrough in our talks and we could not arrive at any settlement despite two rounds of bipartite meetings. At present, there seems to be no way as to how we can convince the Russian promoters”, a top official of Saraf Agencies told Business Standard.

The project was to come up near Chhatrapur in Ganjam district under the banner of Titanium Products Pvt Ltd (TPPL). It is not clear whether the joint venture partners of, who are at loggerheads on the issues of land allotment and shareholding, would have a fresh round of talks.

Saurabh Garg, the state industries secretary said, “We have not received any communication from either of the parties on the progress of their talks. The state government is open to talks with the promoters of the titanium project but first they need to communicate to us.”

On Monday, the state government had directed the two partners of the project to iron out their differences. It may be noted that the proposed titanium project had run into rough weather after the Russian promoters had threatened to pull out of the project due to disputes with Saraf Agencies.

At the heart of the dispute was the controversial manner of land allotment for the project by the Orissa State Industrial Infrastructure Development Corporation (Idco).

Saraf Agencies had entered into a land lease agreement with Idco for around 200 acres of land near Chhatrapur in February this year. The Kolkata-based realty player intended to sub-lease the land to TPPL which had drawn flak from the Russian promoters, who wanted the land directly allotted to the JV company.

While Saraf Agencies held 45 per cent stake in the project, the Russian government held 51 per cent with the remaining four per cent belonging to JSC Technochim Holding, a Russian firm.

TPPL has proposed to invest around Rs 2,000 crore in two phases. This included Rs 1,150 crore in the first phase and Rs 850 crore in the second phase. The first phase of the project was scheduled to be completed by October 2010.

In the second phase, the company needed about 350 acres of land to develop the Special Economic Zone (SEZ). The proposed titanium plant will produce 1,08,000 tonnes of titanium slag, 68,000 tonnes of high purity pig iron, 40,000 tonnes of di-oxide pigment and 10,000 tonnes of titanium sponge per annum

Source: Business Standard

Russian Miners Hike Coking Coal Prices

It is reported that Russian coking coal producers will raise their prices this month representing their first price increases since the start of the global economic crisis.

The increase is seen as an indication the Russian coal sector is approaching the end of diffucult times and that the sector is registering a progressive reanimation.

The Russian coal mining company Belon Group is the first domestic company to announce an increase in its coking coal price, up almost 62% compared to the H1 price level. This week Belon completed the signing of coking coal supply contracts for the next four months at a price level of RUB 3,000 to 3,100 per tonnes FCA Kuzbass. Meanwhile other Russian mining companies will also increase their prices of coking coal by approximately 50% to 60%.

Source: Steel Guru