Mechel to invest $5.5 bln in mining assets in 2012-2015
MOSCOW. Nov 15 (Interfax) - The Mechel group, a major Russian steel and coal producer, plans to invest about $5.5 billion in its core mining assets in 2012-2015, the company said on its website.
Mechel said it could invest as much as $412 million in iron ore mining unit Korshunov GOK , $285 million in Bluestone, a coal miner in the United States, and respectively $1.5 billion and $3.3 billion in Russian coal mining divisions Yuzhny Kuzbass and Yakutugol (including the Elga deposit).
Korshunov GOK currently mines around 12 million tonnes or crude iron ore and sells just over 4 million tonnes of concentrate a year. It is expected that annual ore output of 12.5 million tonnes will be sustained until 2015.
Output guidance for Korshunov GOK in 2011-2015:
| 2011 | 2012 | 2013 | 2014 | 2015 | |
| Crude iron ore production, mln tonnes | 12,7 | 12,7 | 12,5 | 12,5 | 12,5 |
| Iron ore concentrate sales, mln tonnes | 4,5 | 4,6 | 4,5 | 4,5 | 4,5 |
According to Mechel Bluestone's mining plans raw coal production is expected to reach some 6 million tonnes per year by 2015. At the same time cash costs in this period are not expected to deviate substantially from the current levels.
| 2011 | 2012 | 2013 | 2014 | 2015 | |
| Raw Coal, million tonnes | 5,3 | 5,4 | 6,1 | 5,9 | 6,1 |
| Clean Coal | 3,0 | 2,7 | 2,8 | 2,7 | 2,8 |
| Metallurgical coal, million tonnes | 0,5 | 0,4 | 0,4 | 0,4 | 0,4 |
Southern Kuzbass's strategic goals include increasing production volumes, expanding its resource base, constructing new facilities and equipment upgrading. An extensive reconstruction and modernization program is currently under way at the company's enterprises, implementing the most advanced technologies.
Southern Kuzbass' mining plans provide for raw coal production increase up to 21.7 million tonnes per year by 2015:
| 2011 | 2012 | 2013 | 2014 | 2015 | |
| Raw Coal, million tonnes | 14.3 | 16.5 | 19.3 | 20.6 | 21.7 |
| Clean Coal | |||||
| Metallurgical, million tonnes | 9.2 | 10.4 | 12.3 | 12.8 | 14.4 |
| Thermal, million tonnes | 2.6 | 3.3 | 3.9 | 3.4 | 3.3 |
Yakutugol, not including the Elga mine, aims to sustain coal production of 10.7 million tonnes by 2015:
| 2011 | 2012 | 2013 | 2014 | 2015 | |
| Raw Coal million tonnes | 7,8 | 10,7 | 10,7 | 10,7 | 10,7 |
| Clean Coal Metallurgical, million tonnes | 4,7 | 5,9 | 5,5 | 5,5 | 5,5 |
| Thermal, million tonnes | 3,5 | 3,9 | 4,3 | 4,3 | 4,3 |
The Elga will mine and wash high-volatile, highly fluid coking coal with low sulphur, nitrogen and phosphorus content and high calorific value as well as oxidized coals with high calorific value, which will be marketed as thermal coals. Elga will also produce middlings as a byproduct of coking coal washing process which will be sold as thermal coal. According to the mining plans Elga open pit is expected to reach the capacity of 9 million tonnes per year by 2015:
| 2011 | 2012 | 2013 | 2014 | 2015 | |
| Raw Coal million tonnes | 0,2 | 2,0 | 3,0 | 6,0 | 9,0 |
| Metallurgical million tonnes | 0 | 0,3 | 0,5 | 1,3 | 2,4 |
| Thermal, million tonnes | 0,10 | 1,0 | 1,5 | 3,2 | 4,3 |