September 08, 2008

Ukraine coal firm Lubel to float on AIM

It is reported that Lubel a Ukrainian coal mining group is planning to float on AIM by the end of this year. The flotation plan comes after Lubel raised EUR 60 million from institutional investors in Britain, America and Eastern Europe through a private placing handled by JP Morgan Cazenove.

The float plans are still at an early stage, but analysts believe the company will need to raise more than EUR 100 million as the development plans are accelerated.

Lubel has two coal licenses in western Ukraine with proven reserves of 162 million tonnes. Funds raised from the placing will be used to complete a feasibility study and start development of the mines. Lubel estimates that total development costs will be around USD 450 million and is aiming for full production by 2013.

Lubel is majority owned by a group of Ukrainian businessmen and entrepreneurs; forecasts the mines could be producing about 4 million tonnes of coking coal a year around 15% of Ukraine’s annual coal production. The mines could have a 25 year lifespan.