August 29, 2008

Dutch Group to invest in Irkutsk Coal

Reuters recently reported that A Dutch investor group has agreed to invest more than USD100 million in the Irkutsk region to exploit coal and potassium salt as well as to convert coal to liquid fuel.

The group plans to invest USD 50 million in the first 18 months for geological research and project development, with the investment rising to over USD 100 million for exploitation, processing and setting up a sales network. The aim is also to bring leading edge coal to liquid technology to Russia.

Mr Roel Pieper entrepreneur of Dutch Group, who manages investment company ETIRC, said that the group hoped to avoid problems such as those faced by Shell with its Sakhalin 2 project. He said that "By being a public private partnership we start out differently. We have set aside money for the environment as part of the business model. We have government officials in the board right from the beginning."

Mr Pieper said the Irkutsk project also involved Russian Railways, which will extend tracks to serve the project.