Evraz Group SA announced that it has won the tender to develop the Eastern field of the Western part of the Ulug Khemsky coking coal deposit in the central part of the Republic of Tyva in East Siberia.

The tender was held by the Russian State Mineral Resources Agency. The licence will cost RUB 850 million and is expected to be received within two months.

The Eastern field is 800 kilometers to the east of the city of Novokuznetsk, where two of Evraz’s steel mills are located. It borders with the Mezhegey coal deposit, for which Evraz won the licence in March 2010.

The Eastern field has high quality hard coking coal (grade Zh under Russian classification) reserves, including inferred resources of more than 550 million tonnes and out of balance reserves of more than 100 million tonnes. Detailed plans for the development of the Eastern Field will be prepared in due course.

It will take approximately six years to carry out additional exploration and project development. Mine construction is going to commence in 2017. Full production capacity is expected to be achieved by 2021.

Mr Alexander Frolov CEO of Evraz said “The acquisition of the licence for the Eastern Field is in line with our strategy of enhancing vertical integration into raw materials, and in this case coking coal. This field is adjacent to the Mezhegey coal deposit, and there are significant synergies based on sharing the infrastructure needed to develop these two projects. Development of the Eastern Field will not require substantial capital expenditures until 2017.”