The Russian steelmaker Evraz Group (Evraz) and Japan-based company Mitsui & Co., Ltd. have announced the termination of their joint venture agreement to develop the Denisovskoye coal field, which is located in the northeastern Russian federal republic of Yakutia.
Explaining their decision, the companies stated that the project, which included the building of an underground mine and the construction of a coal beneficiation plant, was challenged by difficult geotechnical conditions such as permafrost and excessive water ingress. These difficulties had not been identified during the preliminary stage. Therefore, the actual development of the coal field in question turned out to be less economically attractive than originally estimated.
Regarding the future of their partnership, Evraz and Mitsui stated that they will continue to discuss joint collaboration, mainly in the field of mineral resources and steel products.
The termination of the JV between these two companies was followed by a sale of Evraz's shares in the current project to local company Yakutia Coal-New Technology for approximately $94 million.