In November, A-Property, owned by Albert Avdolyan, increased coal production to 1 mio t per month. As a part of its strategy to ramp up extraction at Elga coal deposit up to 45 mio t/year by 2023 the company is expected to boost the capacity of Elga coking coal project to 18 mio t/ year in 2021. The carrying capacity of Elga-Ulak railway, connecting Elga coal field with Baikal-Amur Mainline (BAM), was also expanded to 12 mio t.
In December 2020, A-Property announced a 100% consolidation of Elga project in Yakutia. The company exercised the option ahead of schedule by purchasing 49% in the project from Gazprombank. The transaction amounted to 45 billion RUR (615.9 mio USD).
In April, A-Property, acquired 51% in Elga from Igor Zyuzin’s Mechel for 89 billion RUR (1.17 billion USD). Elga coking coal deposit was Mechel’s key investment project and remains one of the largest coking coal deposits in the world with overall reserves of 2.2 billion t (according to JORC classification).
Mechel has been developing the coalfield for over 10 years. In 2019 production of Elga coal deposit totaled 4.3 mio t, which accounted for 23% of Mechel’s overall output (see CAA Russian Coal Weekly dated April 24, 2020). In Jan-Nov 2020 Elga coal production amounted to 5.83 mio t (+1.80 mio t or +45% to Jan-Nov 2019).
Considering the plans of the company to increase coal mining to 18 mio t next year, their fulfilment will mean almost 3-fold growth y-o-y.
Source: CAA Analytics
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