OREANDA-NEWS. June 28, 2010. Prime Minister Vladimir Putin said that repairs for Raspadskaya’s damaged mine will cost RUB10bn (USD320m), which its owners will have to pay for, while the government may help if necessary. Putin also added that the final plan of repair work will be ready soon, reported the press-centre of OTKRITIE Financial Corporation.

View: Since there fires still burn inside Raspadskaya’s damaged mine, and a more precise schedule of reconstruction cannot be set before these fires are extinguished, we conservatively estimate that the mine could restart operations in 4Q11. On our estimates, reconstruction costs will be USD300m. Based upon our production forecasts, and the as yet solidified time/cost parameters for repairs, we put 2010E EBITDA at USD427m.  We do not expect the Prime Minister’s remarks to trigger movement in the stock price.

Valuation and Action: We reaffirm our BUY recommendation for the stock, with a target price USD6.8/share, which implies a 58% upside.