Mittal Steel may buy Elegest coal deposit

The world's largest steelmaker Mittal Steel is examining the possibility to buy Elegest coal deposit in Tuva, Russia. It would be the first Russian coal deposit acquired by Mittal Steel, in the case of accomplishment of the transaction, the cost of which would be approximately $1 billion. Mittal Steel will announce its decision regarding to whether or not to buy Elegest coal deposit in the period of two weeks. Elegest coal deposit has the total of 1 billion ton of the finest quality coke coal and approximately 80 billion tons of overall reserves. 80 percent of which is in the layer thickness of 6.4 meters. The mining is planned to start in the third quarter of 2006. It is planned to obtain 300-500 thousand tons of the coal until the end of this year, and raise the mining production to 2 millions tons in 2007. The market analysts believe that Mittal Steel may buy Elegest coal deposit in order to export coke coal to countries of Asia- Pacific ocean region. In addition, Mittal Steel may use the Russian coal deposit as an argument for shareholders of Japanese Nippon Steel, the possibility of acquisition of which was announced by the president of Mittal Steel. In particular, Mr. Mittal may promise the guaranteed supplies of Russian coal to Nippon Steel.