Abramovich's steel giant Evraz acquires 51 % stake in Timir ore project

Russia's largest steelmaker Evraz announced acquisition of a controlling stake in an iron ore project in Russia's far-Eastern Yakutia region for 4.95 billion roubles ($160 million).

The company, controlled by Roman Abramovich, owner of the Chelsea soccer club, said it would own 51 per cent of the Timir project with state-run diamond miner Alrosa owning 49 per cent.

 "The large iron ore resources of Timir in combination with proximity to the existing infrastructure provide for the efficient development of the project as a low cost operation," Evraz CEO Alexander Frolov said in a statement.

Timir, a joint venture between Evraz and Alrosa was  created for the development of iron ore deposits and was currently holding licences for four iron ore deposits in the southern part of Yakutia in Russia.

Investments during the first phase of the Timir project are expected to total $1.8 billion from 2013 to 2018 and the project would create 11,000 new jobs including 4,000 positions at the Tayozhnoye ore mining and processing plant.

According to Frolov, the large iron ore resources of Timir in combination with proximity to the existing infrastructure provided for the efficient development of the project as a low cost operation.

He added, the realisation of the Timir project was an important milestone of the company's strategy for securing a raw materials base for Evraz ZSMK, and was envisaged to eventually replace the gradually depleting reserves of Evrazruda over the next 5-10 years.

"The Timir project has obtained a strategic investor represented by Evraz, which has extensive experience in mining and processing of iron ore," Alrosa president Fyodor Andreev said, the Timir project had obtained a strategic investor represented by Evraz, which had extensive experience in mining and processing of iron ore.

Andreev noted that Evraz's partnership in the project would boost the progress of Timir, while Alrosa continued to participate and finance development of the deposits in accordance with its share in the project.

The first phase of the Timir project would see development of the Tayozhnoye open pit which was projected to produce 15 million tons of iron ore annually. Total investments in the first phase of the Timir project amounting to $1.8 billion for the period from 2013 to 2018.

Frolov said, the realisation of the Timir project was an important milestone of the company's strategy for securing a raw materials base for Evras ZSMK, and was envisaged to eventually replace the gradually depleting reserves of Evrazruda over the next five to 10 years.