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Alrosa not planning major investment in Timir iron ore project

Steel News - Published on Sun, 20 May 2012

Interfax cited Mr Igor Kulichik Russian diamond miner vice president and financial director as saying that Alrosa is not planning major investments in the near term in the Timir iron ore project in Yakutia a 51% stake in which it is selling to steelmaker Evraz Group.

He said that \"Right now only the documentation is being developed, the geology is being clarified and the financial model of the project is being built. Current expenditures on this project in 2012 will fall within RUB 1 billion. We are not talking about big capital investments in the Timir project in the next three years. This is a large project, but it is also very long-term.\"

He added that Alrosa and Evraz Group have secured an extension of the license for Timir. He also said the deal to sell the 51% stake in Timir is being held up.

Mr Kulichik said \"We have been trying to close the deal to sell 51% in the Timir project for almost a year already. The delay is due to the Rosimuschestvo, we can\'t manage to agree on the structure of the deal with Evraz and obtain a directive from Rosimuschestvo.\"

Evraz said earlier that it plans to invest USD 1.5 billion over five years in the Tayezhnoye iron ore deposit, one of Timir\'s four iron ore fields. Alrosa planned to open-pit mine 10 million tonnes of ore at this deposit, and process the ore at the Tayezhny GOK plant with capacity for 20 million tonnes per year. The plant will produce agglomerate and iron ore concentrate, as well as construction stone.

The companies planned to close the Timir deal worth RUB 5 billion in the first quarter of 2012. The deal was approved by Russia Federal Anti-Monopoly Service and the European Commission which took an interest because Evraz is registered in the UK. FAS approved the application of Cyprus-based Cybridge Limited, a unit of the steel group, at the end of December 2011.

Alrosa acquired the license to the Timir iron ore deposits in May 2008 for RUB 5.39 billion. Under the license terms, Alrosa is supposed to build two processing plants with design capacity of 15 million tonnes each, one for ore from the Tayezhnoye and Desovskoye deposits and the second for the Tarynnakhskoye and Gorkitskoye deposits. It was expected that the plants could reach average annual production of 20 million tonnes of ore in 2018. The company commissioned the calculation of the deposits\' JORC resources in 2010.

Source - Interfax

Posted By : admin on Sun, 20 May 2012
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