UC Rusal sells 50% stake in the company licenced to mine at Ekibastuzskoye Coal Field to Samruk-Energo

UC RUSAL has  completed a sale of a 50% stake in a company which holds the coal production licence at the Bogatyr and Severny deposits of the Ekibastuzskoye coal field in the Pavlodar region of Kazakhstan to Samruk-Energo, a subsidiary of the Kazakhstan state-controlled national welfare fund Samruk-Kazyna*.

As part of the established joint venture, the companies plan to produce and supply coal to meet the demand of Kazakhstan and Russia. By 2020, the annual output of the Bogatyr and Severny deposits will have increased to 57 mln tn. During this period the operations at the Bogatyr deposit will include a complete conversion from the obsolete transportation scheme (motor and rail road) to a new logistics network which includes a motor road and a belt conveyor.

The long-term strategic plans of both parties include the creation of a global energy company with coal assets in Russia, South-East Asia and Australia on the basis of the established joint venture.

* Previous name of the company – SAMRUK Holding. In November 2007, UC RUSAL and SAMRUK Holding entered into an agreement to establish a joint venture to produce coal at the Bogatyr and Severny deposits of the Ekibastuzskoye coal field.

Information about the coal deposits:

The Bogatyr and Severny coal deposits are located in the Pavlodar region of Kazakhstan. The aggregate reserves of the two deposits total approximately 3 bln tonnes of coal. Expected production in 2008 is around 46 mln tonnes, which will be a record-breaking number for the past 10 years. Around 50% of the output is used to feed Kazakhstan's energy generation facilities. Aside from a number of CHP and GRES in Kazakhstan, other major consumers of the Ekibastuz coal include Russian CHP and GRES located in the Ural Mountains. UC RUSAL assumed ownership of the deposits from Access Industries as part of the merger between RUSAL, SUAL and Glencore.