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En+ and Shenhua to jointly develop the Zashulanskoye coal deposit in Transbaikal

 

Razrez Ugol LLC, a 50/50 joint venture of Limited Liability Company Vostsbiugol (forming part of En+) and Shenhua, China’s largest coal producer, announces that it has won the competition for exploration and production of black coal at the Zashulanskoye deposit in the Transbaikal Territory. The company has paid RUB 246.9 mln for the license.

The reserves of the Zashulanskoye deposit are estimated at 252 mln tons of C1 high calorie and low sulfur coal.

The company plans to build an open-pit mine with the capacity of up to 6 mln tons of coal per year. The coal will be used by power generation and utility companies in the Transbaikal Territory, and will also be exported to China.

Apart from the coal mine, the partners intend to build a road to the nearest railway station (about 100 kilometers), utility systems, a camp for shift workers, housing to provide key personnel and specialists with permanent accommodation, as well as social facilities.

According to preliminary estimates, over RUB 30 bln may be invested in the project. After the project is launched, it will create over one thousand new jobs, at least 80% of which will be taken by residents of the Transbaikal Territory. When the project reaches its full capacity, annual tax payments are expected to exceed RUB 400 mln.

In the future, the partners will also consider the possibility of constructing a mine to develop coal reserves outside the deposit.

In the coming two years, the company intends to conduct geological exploration and confirm coal reserves, and subsequently prepare all necessary designs. Production at the mine is expected to start in 2018 and to reach its full capacity in 2021.

Maxim Sokov, First Deputy CEO of En+ Group, commented: “This is our first joint project with Shenhua forming part of our strategic partnership. I am sure that it will contribute greatly to economic development of the Transbaikal Territory.”

“The Zashulanskoye deposit development is a project we are starting from scratch. I am convinced that by sharing their resources, expertise and competence, Vostsibugol and Shenhua will be able to create a state-of-the-art coal producing company,” said Evgeny Masternak, Managing Director of En+ Group (Coal Business) and CEO of Vostsibugol.

Shao Junjie, Chairman of the Board of Directors of Shenhua International, said: “This is the first project related to Shenhua’s investments in the Russian coal industry; it is undoubtedly an important step towards implementing the plan of Sino-Russian cooperation in the coal industry. We are absolutely convinced that our joint efforts will ensure that the project fully meets the highest standards in safety, environmental protection and economic efficiency for the benefit of our countries. The project will contribute to economic and social development of the region.”

About the companies:

En+ Group (www.enplus.ru) is a leading Russian industrial group comprising companies in the metals, mining and energy sectors, as well as strategically related industries. En+ Group holds a controlling stake in UC RUSAL, the world's largest aluminum producer; it also owns Russia's largest independent power company, EuroSibEnergo, and SMR, a producer of ferromolybdenum, as well as large coal deposits and logistics business. En+ Group ‘s investment projects include construction of power plants and ironworks, production of coal, iron ore, gold and other resources, as well as R&D in the nuclear power industry. The core assets and new projects of En+ Group are located in Eastern Siberia. In 2012, the company’s consolidated revenue totaled USD 13.6 bln.

Shenhua Group (http://www.shenhuagroup.com.cn) is one of the world’s largest coal producers having its headquarters in China. The company produces coal in China, Australia and Indonesia. In 2012, Shenhua Group produced over 400 mln tons of coal. The company also owns power plants with the capacity exceeding 63 GW, railways and ports in China. The company employs over 200 thousand people.

Press service of En + Group

December 11, 2013
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