OREANDA-NEWS. April 30, 2010. ОАО Raspadskaya (RTS, MICEX: RASP) (“Raspadskaya”), one of Russia’s leading coking coal producers, announces today the closure of the deal on 28 April 2010 between ZAO “Raspadskaya-Koksovaya” (owned by Raspadskaya) and OAO “OUK “Yuzhkuzbassugol” (owned by Evraz Group) for acquiring 100% voting shares of ZAO “Koksovaya”. The amount of the deal is not disclosed.

ZAO “Koksovaya” is a newly founded company with all the property and equipment required for coal deposits development. Company’s total reserves amount to 152 million tonnes of hard coking coal (K and KO grades under the Russian classification). ZAO “Koksovaya” is developing the same coal seams as ZAO “Raspadskaya-Koksovaya”, as long as both mines are located on neighboring subsoil areas – “Coal Deposit #1” and “Coal Deposit #2” of Olzherasskoe coalfield in Kemerovo region. Total hard coking coal reserves of both mines are estimated to be 328 million tonnes.

It should be underlined that prospective developent of ZAO “Koksovaya” can not be considered separately from ZAO “Raspadskaya-Koksovaya – the mine under construction, as long as both subsoil areas of integrated coal deposit will be developed according to the most optimal mining plan. This mining plan represents a consecutive mining of upper seams ready for extraction, by using infrastructure of ZAO “Raspadskaya-Koksovaya”.

Starting May 2010, the deal considers a conclusion of a 10-year contract for delivery of a part of coal production from total coal volumes mined by ZAO “Koksovaya” and ZAO “Raspadskaya- Koksovaya” at market price by using existing commercial practice. The coal production will be supplied to Evraz Group companies, which among others include: in Russia – two steel mills in Siberia, one steel mill in Urals, in Ukraine – three coke-chemical plants.

Plans for production and sales volumes by markets and clients will be announced in frames of Raspadskaya long-term Strategic program that is currently being specified.

Raspadskaya’s CEO, Gennady Kozovoy, highly valued a synergy of the deal: "The experience showed that stable and highly effective mining requires unprecedented measures to provide safety for preparation and performance of mining works. The main synergy of acquiring ZAO ”Koksovaya” is represented by technological optimization of mining works development of integrated coalfield.

Mining, transportation and enrichment of the coal produced at subsoil area “Coal Deposit #1”
(ZAO “Koksovaya”) through infrastructure of ZAO “Raspadskaya-Koksovaya” can be performed without substantial capex with simultaneous reduction of production risks. Coal assets integration will provide not only maximum effective coal reserves extraction and minimization of costs but also enable to accelerate the achievement of the nameplate production capacity of “Raspadskaya-Koksovaya” mine.