United Industrial Corporation (OPK) and Mitsui cooperate in coking coal mining in Tyva
08 Jul 2009
United Industrial Corporation (OPK) and Mitsui & Co Ltd have signed an agreement on collaborative development of the Elegest coal-field in Tyva, in southern Siberia, one of the richest coal mines in the world, with a total reserve of approximately 900 million tons.
The two companies will conduct a feasibility study on the construction of a mining complex at the Elegest coal-field, as well as for a railway line for coal transportation. Particularly, Mitsui will provide a part of the required expenses for the feasibility study, technical device and will have a priority option to acquire a minority stake of the project.
Elegest coal is the best coking coal in Russia and one of the best in the world as it stands out for its low ash content, high coking power and low sulfur levels.
OPK's subsidiary, OPK Mining is granted a mine working permit and intends to increase coking coal production that will reach 12 million tons by 2014. Thus, OPK will become the largest supplier of high-quality coking coal to the Russian and the international markets.
OPK Mining has a license to exploit the Elegest coal-field with total reserves of approximately 900 million tons of high-quality coking coal. The exploitation of the coal field started in June 2008. The project also implies the construction of a 460km long Kyzyl-Kuragino railroad.
The project involves the construction of a 460km railway line that will connect with the Trans-Siberian Railway. This year, OPK has signed an investment agreement with the Federal Railway Transport Agency of the Russian Federation on the collaborative financing of the railway construction by OPK and the Investment Fund of the Russian Federation on an equal basis.
The collaborative development of the Elegest coal-field is beneficial for OPK, as for Mitsui. Mitsui has positioned coal as one of its priority business areas. Thus, the largest Japanese corporation aims to establish a well-balanced portfolio with attractive assets in regions such as Russia, in addition to its core operating assets in Australia, for further contribution to stable coal supply to meet global demand.