Russia’s NLMK secures coking coal supplies

Friday, Jan 28, 2011
Russian steel producer NLMK has won the right to develop the Usinskiy-3 coking coal deposit in the north of the country, having offered Rbs900 million ($30.2 million) for the license at an auction on 21 January.
Usinskiy-3 reserves will allow NLMK to rely on its own coal resources in future, as at present the company does not produce any coal and has to buy on the open market.
Usinskiy-3 is a large coking coal deposit located in Komi, a region in the north of Russia. Usinskiy-3 contains more than 227million tonnes of high-quality coking coal.

NLMK plans to have the necessary infrastructure ready to start production at Usinskiy-3 by 2016, and expects to bring it to capacity of 4.5 million tonnes per year in 2018.
The project will require Rbs45.5 billion of investment, according to NLMK.
Currently, NLMK consumes about annual 5.5 million tonnes of coking coal and has to buy this in the market, the firm told Argus.

NLMK gets coal mostly in the domestic market, with smaller amounts coming from outside Russia. The company imports 600,000 tonnes of coking coal per year from the US. (sourced:Argus Media)