Russian mining and steel group Mechel has announced that the supervisory board of Russian bank Vnesheconombank (VEB) has approved finance totaling $2.5 billion for the development of the first phase of Mechel's Elga Coal Complex located in the Republic of Sakha (Yakutia) in the Russian Federation.
The terms of the financing stipulate that the funds from Vnesheconombank be used to complete the first phase of the Elga deposit's development project. The first stage includes construction of a railroad and a mining and washing complex with an annual capacity of 11.7 million mt of run-of-mine coal by 2017. The project's implementation will create over 5,000 new jobs.
The loan has a term of 13.5 years with a grace period until 2017. Vnesheconombank's representatives will also have the right to two out of five seats on the board of directors of Elgaugol, which holds the license for the development of the Elga coal deposit.