Rusal To Set Up JV To Develop Kazakh Coal, Energy Projects

MOSCOW (Dow Jones)-Russian aluminum producer UC Rusal Thursday said it has signed a memorandum of understanding with Kazakhastan’s state-run asset managing company Samruk Holding to jointly develop Kazakh coal fields.

The agreement calls for forming a joint venture between Rusal and Samruk Holding to develop two UC Rusal-owned coal fields in Kazakhstan.

The two companies also agreed that UC Rusal will transfer 50% shareholding in its Ekubastuzskoye and Severny coal mines, located in northern and northeastern Kazakhstan, to Samruk Holding.

The total coal reserves of Bogatyr and Severny are estimated at 4.5 billion metric tons of coal. The annual output at these mines total 42 million tons, or 45% of all coal produced in Kazakhstan.

UC Rusal and Samruk holding will use the jointly-mined coal to generate electricity to power steel producers in Kazakhstan.