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. Last Updated: 07/27/2016

Severstal Joins Siberia Gold Rush

Miner and steelmaker Severstal has signaled its intent to enter the gold-mining sector by winning an auction Thursday to develop a deposit in eastern Siberia.

A Severstal subsidiary paid 268.8 million rubles ($10.5 million) to secure a 25-year license for the Uryakh deposit in Irkutsk region, said Sergei Loktionov, spokesman for Severstal Resurs, the company's mining division.

The deposit is Severstal's first wholly owned gold asset and raises the company's exposure to the metal after its purchase last month of a 22 percent stake in Celtic Resources, a London-listed miner with gold mines in Kazakhstan.

"The acquisition is a continuation of our diversification strategy," Loktionov said. "We are looking at the attractive proposition of other minerals."

Severstal, majority-owned by billionaire Alexei Mordashov, is the country's largest steelmaker including foreign assets and its second-largest miner of coking coal, used to make steel.

The company has previously said it is looking at other metals, and it formed a joint venture with Anglo American in October to prospect for nickel, copper and zinc in northwest Russia.

The starting price for the gold auction, which was won by Severstal subsidiary Severnaya Zolotorudnaya Kompania, was 48 million rubles ($1.87 million), a document issued ahead of the auction by the Federal Subsoil Resource Use Agency showed.