According to media reports, Russian steelmaker and iron ore producer Evraz Group (Evraz) has decided to sell its coal-producing Mine 12 to the Kemerovo-based company Stroyservis, due to the high cost of coal production at the mine.
Evraz's Mine 12, acquired in March 2005, is one of the oldest active mines in the Kemerovo region (located in the southern part of western Siberia), operating since 1917. In 2008, Mine 12 produced 934,000 mt of coal, accounting for 6.7 percent of Evraz's total coal output. The mine's coal reserves are estimated at 42.3 million mt, including 18.6 million mt of coking coal. According to analysts, the cost of coal production at Mine 12 amounted to about $40-50/mt in 2008, compared to the coal production coast of $30-31/mt at Evraz's other mining assets, Raspadskya and Yuzhkuzbassugol.
Stroyservis has four open pits in the western Siberian region of Kuzbass which produced 3.2 million mt of coal in 2008, and also operates one coal-preparation plant.
The details of the deal have not been disclosed, but it is estimated that the cost of Mine 12 might not exceed $10-15 million.