Evraz buys stake in Timor iron ore project in Russia

Steelmaker Evraz has signed an agreement to acquire a majority stake in the OSJC Timir iron ore project in Russia.

Steelmaker Evraz has signed an agreement to acquire a majority stake in the OSJC Timir iron ore project in Russia.

The company will pay 4,950 Russian Ruble (around $160m) for a 51% interest in the prospect. Alrosa will own the other 49% holding (minus one share) following completion of the transaction.

The joint venture includes four iron ore deposits - Tayozhnoye, Desovskoye, Tarynnakhskoye and Gorkitskoye - in the southern part of Yakutia in Russia.

The total mineral resource base under the Russian geological classification is 3.5bn tonnes.

The first phase involves the development of the Tayozhnoye deposit, located 150km north of Neryungri city, with total mineral resources under the Russian geological classification of 341m tonnes of iron ore and grades of 38-40%.

Total investments in the first phase of the project are estimated to amount to about $1.8bn from 2013 to 2018.

"The large iron ore resources of Timir in combination with proximity to the existing infrastructure provide for the efficient development of the project as a low cost operation," said Chief Executive Officer Alexander Frolov.

"The realisation of the Timir project is an important milestone of the company's strategy for securing a raw materials base for Evras ZSMK, and is envisaged to eventually replace the gradually depleting reserves of Evrazruda over the next five to 10 years."

RD

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