September 08, 2008

Norilsk to develop coking coal field in Siberia

Norilsk Nickel, the world's largest producer of the metal said that it plans to develop a 5.5 billion tonne Siberian coal field and has asked BHP Billion to join the project.

The deposit is located 460 kilometers north of the nickel, copper and palladium producing factory town of Norilsk in the Krasnoyarsk region. It is 120 kilometers from the nearest settlement and does not have transport or power infrastructure.

Mr Maxim Finsky vice president of Norilsk said the company paid USD 1.37 million at an auction for the Syradasaiskoye deposit. The deposit may produce 12 million tonnes per year of coking coal used as a raw material by steelmakers from 2016. He said that "There's a 23 million tonnes deficit in coking coal in Europe that currently gets covered by Australian imports. The plan is to sell most of the coal in Russia, but also export to Europe."

Mr Finsky said Syradasaiskoye would become Norilsk's first coal project. The company looked at the site with Melbourne-based BHP, the world's biggest mining company and has offered it a minority stake in the project.