Evraz sells the Koksovaya coal company to Raspadskaya

Evraz Group announces the closing of the transaction to sell 100% of the voting shares of ZAO Koksovaya (“Koksovaya”), a wholly owned subsidiary of Evraz’s Yuzhkuzbassugol, to ZAO Raspadskaya-Koksovaya, part of OAO Raspadskaya coal company (both hereinafter referred to as “Raspadskaya”).The transaction amount is not disclosed.

Koksovaya’s coal reserves amount to 152 million tonnes of coal (grades K and KO under the Russian classification equivalent to hard coal under the international classification). These reserves form part of a coal field. Raspadskaya owns another part of this coal field and is currently in the process of constructing a coal mine on it.

The sale of Koksovaya to Raspadskaya is in the interests of both companies, as the coal field will be developed according to a single plan using the Raspadskaya infrastructure. In order to develop the coal fields separately, additional capex would be required and there would be a lack of synergies in the mining works.

As part of the transaction, a 10-year contract will be concluded in May for the supply of a certain volume of coal mined by Koksovaya and Raspadskaya-Koksovaya to Evraz’s companies, in particular to its Russian steel mills and Ukrainian coke chemical plants.