The Russian mining and steel producer Evraz Group has announced that it has renounced the right to purchase the license to develop the Mezhegeiskoye coking coal deposit, located in Russian Republic of Tuva, due to the continuing global financial and economic crisis and also due to the weakening conditions in the coal market.
As SteelOrbis previously reported, in July 2008 Yuzhkuzbassugol won the right to develop the Mezhegeiskoye coking coal deposit, which has an estimated reserve of 213 million mt, by offering the highest price of Ruble 16.94 billion ($724 million) at the auction of the deposit.
As winner of the auction, Evraz received the right to the license to develop the deposit in question for the next 20 years and was obligated to start producing at the designed production capacity within 66 months following the issue of the license.
Meanwhile, Evraz intends to develop in the future its own reserves of coal based on its existing licences and coal production facilities in the Kuzbass region. Yuzhkuzbassugol alone, which is the company's biggest coal producer and its main supplier, has estimated reserves of 1.6 billion mt of coal, including one billion mt of coking coal.
In 2008, Evraz mined 14 million mt of coal, including 9.1 million mt of coking coal, with Yuzhkuzbassugol accounting for 13 million mt and 8.4 million mt, respectively.
Accordingly, at the current consumption level, Evraz's mining division is capable of fully satisfying the coal requirements of the company's steelmaking operations.