Metalloinvest might reduce output as Lithuania halts transit, seeks help from Russian Railways - senator

MOSCOW. March 23 (Interfax) - Metalloinvest, one of Russia's largest iron ore producers, might reduce production due to problems exporting its products because of the suspension of transit shipments through Lithuania.

"I was just at [Metalloinvest iron ore division] Mikhailovsky GOK [in Kursk Region]. They have a problem shipping product. They will have to reduce production by around a third, that's 200,000 tonnes per month," Kursk Senator Grigory Rapota said during an "open dialog" with Russian Railways (RZD) CEO Oleg Belozerov in the Federation Council on Tuesday.

"They, among other things, pleaded to consider redirecting this freight to eastern ports, because in the western, European part of Russia there are no options, neither in Leningrad Region nor on our Black Sea coast....If it was possible to do such a transfer, although I understand that you have a very tight schedule, it would really help out the company," Rapota said.

RZD is aware of the problem and is looking for solutions, Belozerov said. "As for Mikhailovsky GOK, the problem is that it was also pivoting, going south. Moreover, the last thing that our Lithuanian colleagues came up with is that they did not allow passage to their Lithuanian ports, which is what created the problems. But we'll see, maybe we'll get into China and reach the Indian Ocean from the other side. Right now we're looking at intensifying the route of the North-South transit corridor. That is, we just need time right now, we'll turn around and find a possible solution," Belozerov said.

At the beginning of March, Lithuanian Railways announced that it would stop transporting the products of Metalloinvest, whose shareholder Alisher Usmanov has been hit by European Union sanctions, to the Klaipeda seaport. Lithuanian Railways carried more than 1 million tonnes of Metalloinvest product last year.

Most of Metalloinvest's exports are shipped through the Black Sea port of Novorossiysk. Last year the company also began shipping through the new Ultramara terminal in Ust-Luga, on the Baltic Sea.