Reuters AlertNet Lite - Russia coal mine to resume full shipments by July

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Russia coal mine to resume full shipments by July

22 Mar 2007 13:59:34 GMT
Source: Reuters

MOSCOW, March 22 (Reuters) - Yuzhkuzbassugol will cut coal supplies to some customers by 5-10 percent until the middle of the year after an explosion at its Ulyanovskaya mine that killed at least 108 people this week, the company said on Thursday.

Normal operations at the mine would resume from July 1 and the financial loss from Russia's worst mining disaster since the fall of the Soviet Union would total no more than 720 million roubles ($28 million), the company said in a statement.

"The accident will not have a critical impact on the company's financial position," said Yuzhkuzbassugol, Russia's largest underground coal miner and producer of coking coal used in the steel industry.

Yuzhkuzbassugol is owned 50 percent by its management, which has operational control, and 50 percent by Evraz Group <HK1q.L>, Russia's top steel maker by domestic volume and second-largest to Severstal <CHMF.MM> <CHMFq.L> if foreign assets are included.

Interfax news agency quoted Yuzhkuzbassugol's financial director, Yuri Kushnaryov, as saying supplies to Evraz mills would not be cut as a result of the disaster.

The agency said Evraz, which operates three Russian steel mills, takes about half of the miner's output. Yuzhkuzbassugol spokeswoman Marina Chelapko said the company also supplied other Russian steel makers as well as exporting some of its coal.

Interfax also quoted Kushnaryov as saying the company had not abandoned plans to list shares. Chelapko declined to comment on the proposed initial public offering.

A former Yuzhkuzbassugol spokesman said last year the company was planning an IPO to finance a $700 million investment programme. Since then, its general director, Vladimir Lavrik, died in a helicopter crash in September.

Yuzhkuzbassugol, which operates nine coal mines, said prior to the disaster it planned to produce 19.5 million tonnes of coal this year, nearly 12 percent more than in 2006. It has so far not changed its production forecast.

The company said in the statement losses from the disaster would include 200 million roubles in a one-off payment to the families of those who died, plus another 270 million roubles in additional aid, such as housing.

After an investigation was completed, the company would spend about another 250 million roubles restoring the mine.

"The management of the company is sure that, from July 1, Ulyanovskaya will be working to plan," the company said. To see the latest Reuters story about the disaster at Ulyanovskaya, please double-click on [ID:nL22118754] To see a story on Russian mine safety, please double-click on [ID:nL20426251] To see a CHRONOLOGY of coal mining disasters in Russia, please double-click on [ID:nL21587365]

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Last updated:Thu Mar 22 14:00:51 2007