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The head of Yakutia: the development of the Elga field is in jeopardy
The development of the Elga coal deposit by Mechel Industrial Holding is in jeopardy. This was stated by the head of Yakutia Aisen Nikolaev. By the end of the 2020 year, the investor promised to invest RUR bln into the 80 project, and bring coal production to the level of 20 mln tons per year, but so far the promises have not been fulfilled.
As the RBCover four years, about 5,5 billion rubles were invested in the development of the field, and coal production does not exceed five thousand tons per year. Aisen Nikolaev told the publication that he did not see how the company would be able to find sources and manage to invest other funds in the remaining year. If Mechel does not fulfill its investment promises, it may be deprived of tax benefits that are granted to participants in regional investment projects.
The Elga coking coal deposit in Yakutia is one of the largest in Russia. Its reserves are estimated at 2,2 billion tons of solid fuel. Mechel began production at this site in 2011. A railway was built, production infrastructure began to be created. However, the company now has a high debt burden. Excluding penalties and fines, it amounts to 408 billion rubles.
As a result of the debt restructuring, 49% of the Elga project came to Gazprombank, which could sell it to a third-party company. The main applicant is A-Property, which belongs to one of the founders of Yota, which already has a controlling stake in the Yakutsk Fuel and Energy Company. The investor plans to create an industrial cluster on the basis of YATEC and the Elga deposit.