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How does the Australian work in Chukotka? - EastRussia |






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How does the Australian work in Chukotka?

Tigers Realm Coal Limited feels comfortable in Chukotka

From Anadyr to Melbourne - 12 thousand kilometers. It would seem that in common with the harsh Arctic region and fertile southern continent? The link was coal. The Australian coal company Tigers Realm Coal Limited (TIG) feels comfortable in Chukotka, successfully conducts geological exploration in the Bering coal basin and is preparing to start developing the first of a whole group of world-class coking coal fields discovered by it. Tigers participate in the first Eastern Economic Forum, which takes place in September in Vladivostok.

How does the Australian work in Chukotka?
Russia has giant deposits, huge land areas, but the degree of exploration of the subsoil, especially in the Far East, is very low - several times lower than that of the main commodity powers-competitors: the USA, Canada, Australia, Latin America. Tigers also consider the Far Eastern regions of Russia to be extremely promising, so they increase the volume of prospecting and mining operations. Particularly attractive to the Australian coal miners Chukotka. And not only because it is a very promising region in terms of mineral resources and energy resources. The weighty plus is that Chukotka is well located, has an extended access to the Pacific Ocean, which means that it is possible to develop a port infrastructure for exporting products to nearby Asian markets. A number of projects for the extraction of minerals have already been implemented. Chukotka attracted not only significant investments of TIG in search of coking coal, but also billions of dollars of investments by Canadian Kinross Gold and Russian Polymetal in exploration and production of gold - attracted not only the wealth of its subsurface, but also a competitive tax regime, well-established and fast procedure of obtaining the necessary permits and approvals.

Over the past four years, Tigers have invested more than 85 million dollars in discovering coking coal deposits on the coast of the Bering Sea, having prepared a resource base (591 million tons of deficit world brands) sufficient for exporting over 10 million tonnes of coking coal per year. Most of the invested funds were attracted from Asia and Australia, but last year, Russian investment funds joined foreigners.

The Russian Direct Investment Fund (RFPI) and Baring Vostok Capital Partners (BVCP), together with Asian and Australian investors, invested almost 47 in Tigers out of a total of 55 million dollars of raised funds. This money went to the preparation of the Bank's Feasibility Study and the design of the development of the coking coal deposit Fandyushkinsky Field, the first of the open on North Amaam (starting Project F), and the continuation of exploration in the Amaam sector.

"We are very pleased that the two universally recognized funds - RFPI and BVCP - have demonstrated faith in the potential of TIG projects, giving the company substantial investment. We are grateful that the funds have agreed to participate in this project. This confirms our opinion that our projects are world-class projects and Russia is an attractive target for investment. We see great potential for further joint development of a larger Amama field, "said Craig Parry, TIG's CEO.

The governor of Chukotka, Roman Kopin, confirmed that the government of the Chukotka Autonomous Region highly appreciates the importance of the new investment project: one of the most promising sites of the Chukotka industry. At the same time, this is a profitable investment field. We express the hope that bilateral cooperation within the framework of this project will be fruitful. ” The head of the region stressed that the Bering project is fully supported by the regional government and the Australian partner is provided with the necessary assistance for its implementation.

The Australian company believes that the Russian Far East has every opportunity to become one of the main suppliers of minerals to Asia, and especially to China. The latter in the meantime continues to search for alternative suppliers of raw materials. The Russian Far East and, in particular, Chukotka, are in the field of view of Chinese entrepreneurs as potential new suppliers. Advantages over other countries are comparatively low costs and, in comparison with traditional markets, less remoteness. Currently, the volume of trade between the Russian Far East and China is about 3 billion dollars per year. Projects such as the export of coking coal from Chukotka are capable of increasing this figure many times.

The so-called "Project F", realized on the territory of the North Amaam deposit, is the starting point for Tigers Realm Coal Limited. Priority interest in this site in the company is explained by the fact that there is explored a fairly powerful layer of low-sulfur coking coal, suitable for cheap quarrying. The territorial proximity of the site to the existing seaport of Beringovsky is also advantageous.

The project includes a mining complex with a coal mine, an enrichment-sorting factory and an associated infrastructure; transport infrastructure with 35-kilometer the all-season road from Project F to the existing seaport of Bering (about 17 km has already been built); coal terminal with coal warehouses and modernization of the existing fleet loading fleet. According to the bank's feasibility study, the Australian company plans to export up to 1 million tons of low-sulfur coking coal per year from the Fandyushkinskoye field. Coal of Chukotka in the first place will be sent to China, South Korea and Japan.

It is expected that Project F, like other deposits of the Bering coal basin, will become part of the first in the territory of the advanced development (TOR) in Chukotka. The TOP regime will reduce the tax on mining operations from 57 to 34 rubles for 1 ton, the profit tax will decrease from 20% to 18% for 2015-2020 years and up to 8% in 2021-2025 years. Benefits for UST (reducing the total workload to 7,5% of the wage fund) are designed to attract qualified personnel.

Based on the results of geological exploration work 2013-2015 years, it was possible to significantly increase the tonnage of "measured" and "specified" resources. Mr. Parry does not doubt that the reserves and, correspondingly, the volumes of cheap quarrying will increase: "Most of the coal basin has not been studied in detail yet, there is an impressive potential for further increase in reserves as exploration continues." According to him, compared to July of 2013, the resources of North Amama are increased by 170% and now amount to more than 72 million tons.

The world coal market has been shaken for the past four years by a severe crisis, but even in times of crisis, the extraction of coking coal on the coast of the Bering Sea promises to be profitable. "Of course, now is not the best time to start such a large-scale project, but we are inspired by the fact that it is quite simple and understandable technically. The Pacific Ocean is near, coal - here it is. Everything can be seen on one sheet of the map. We are optimistic, "said Craig Parry, CEO of Tigers Realm Coal Ltd.


Tigers Realm Coal Limited (TIG) is a company specializing in the production of coking coal, whose shares are traded on the Australian Stock Exchange. Owns 80% of the authorized capital in Russian legal entities that have a number of licenses for exploration and production of coal in two licensed areas - in Amaam and Upper Alkatvaam (the working name of the site is North Amaam).