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Russia's Severstal adds licenses to extend Vorgashorskaya coking coal mine's life

Highlights

Russian mining and steel company Severstal has extended the life of one of its six coking coal mining assets by five years, from 2024 to at least 2029, with the acquisition of licenses for two sites adjacent to its Vorgashorskaya mine, a spokeswoman for Severstal told S&P Global Platts Thursday.

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The company's Vorkutaugol mining subsidiary has acquired the two licenses which have combined reserves of 18.6 million mt and expected output of 2.5-3 million mt/year over a six- or seven-year period of operation.

As a result, the mine will deliver more coal in the 2020s and last for more years, according to the company.

The added reserves comprise grades 1Zh and GZhO in equal proportions. Although GZhO is a steam coal, Vorkutaugol has developed production of low-ash concentrate from this particular grade and it is suitable for use in blast furnaces.

Vorgashorskaya will start tapping to the additional reserves in the autumn of 2022 and exhaust them in 2029; without the new licenses, it would have depleted its current resources in 2024.

There are in addition a few more coal-rich sites nearby that may be licensed to support operations beyond 2029, according to the spokeswoman.

Based in Russia's northwestern Komi republic, Vorkutaugol operates five deep mines (Severnaya, Vorkutinskaya, Vorgashorskaya, Zapolyarnaya and Komsomolskaya), open pit mine Yunyaginsky and coal washing plant Pechorskaya. In H1 2019, it processed 3.6 million mt of coal converting it to 1.8 million mt of concentrate with this finished output being44% higher year on year.

-- Ekaterina Bouckley, katya.bouckley@spglobal.com

-- Edited by Alisdair Bowles, alisdair.bowles@spglobal.com