Evraz raises estimate for vanadium plant project in Tula Region to $260 mln

TULA. July 3 (Interfax) - The cost of the project to construct a plant to produce vanadium at the Uzlovaya special economic zone (SEZ) in the Tula Region has risen to $260 million, Denis Pavlyuchenkov, Evraz vice president and director of the vanadium division, told Interfax.

"If in dollars, then our estimate is somewhere around 260 [million] as of today. In fact, yes, many factors [have affected the rise in the estimate for investment in the project]. First, construction materials [have risen in cost]; and second, the shortage in contractors. In fact, we have had to revise contracts with many of our partners, and [there has been] a rise in cost. Naturally, it is the equipment. Despite about 90% of the equipment being manufactured domestically, metal is still nevertheless growing [in price], and the cost of equipment is increasing. Probably one of the largest price increases is all the automation," Pavlyuchenkov said at the plant's construction site during Economic Development Minister Maxim Reshetnikov's visit to the Uzlovaya SEZ.

Evraz had previously estimated investment in the project at approximately $228 million.

The plant is scheduled to launch production in summer 2025. "The timeframe of 2025 is absolutely realistic. I think it could be in the summer," Pavlyuchenkov said.

Evraz is using its own funds to finance the project.

The company is currently carrying out construction and installation work at the site, including installing process equipment.

As previously reported, that the new enterprise will process up to 100,000 tonnes of raw materials per year, and produce about 19,000 physical tonnes of vanadium pentoxide.

This is actually Evraz's second production facility in the Tula Region. Specifically, OJSC Evraz Vanady Tula produces vanadium pentoxide and ferrovanadium of various grades, and has been part of the Evraz group since December 2009.

Evraz is a large vertically integrated metals and mining company.