Russian mining and metal company, Mechel, has announced that Elgaugol OOO project co. has received the US$ 150 million first tranche of project financing for the Elga coal complex’s first stage from Vnesheconombank. The total financing of the project is estimated to be US$ 2.5 billion.
Mechel said that receiving the funds would allow the company to continue working on the project regardless of market volatility and attain planned results as scheduled. “The quality of Elga’s coals and gewographic location make this prject one of the most efficient in the world,” Igor Zyuzin, chairman of the board of directors, said.
First deputy chairman of Vnesheconombank, Andrey Sapelin, said that it was through the financing of projects such as the Elga coal complex that the Far East and eastern Siberia would be able to develop and improve their economies. “This project is a key one for the region in the sense of economic effect,” Sapelin said.
The financing of the first development stage of the Elga coal complex was approved by Vnesheconombank’s supervisory board in September 2013. The loan has a tenor of 13.5 years with a grace period until 2017. According to the transaction conditions, Vnesheconombank’s funds will be used to complete construction of a railroad and a mining and washing complex with a capacity of 11.7 million tpa of coal.
The construction work is estimated to be completed by 2017.
The Elga coal deposit is Russia’s largest and one of the world’s largest deposits of high-quality metallurgical coal. The deposit is located in southern Yukatia, with total reserves of 2.2 billion t, according to JRC standards.
Adapted from press release by Sam Dodson
Read the article online at: https://www.worldcoal.com/mining/02122013/financing_for_russian_coal_project_310/