Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Norilsk, BHP to Start Arctic Mining in 2015

MURMANSK — Norilsk Nickel plans to start mining coal with BHP Billiton in the Russian Arctic from 2015, the first production to result from a three-year-old alliance between the mining giants.

BHP Billiton, the world's largest miner, will join Norilsk in developing the Syradasai deposit in a project that could eventually produce as much coking coal for the steel industry as Russian market leader Mechel produced last year.

Nikolai Matyushenko, deputy director for production development in Norilsk's transport department, said on Friday that the project envisaged construction of a processing plant and power station at the deposit.

"From 2015, we intend to mine 8 million tons and then to increase it to between 12 million and 15 million tons," Matyushenko told reporters on the sidelines of an investment conference. He was referring to annual production.

The Syradasai deposit is about 100 kilometers (63 miles) from the port of Dikson on the Kara Sea, even further north than Norilsk's Arctic nickel, copper and palladium mines.

Matyushenko, who declined to say how much would be invested in the project, said the joint venture partners planned to build a shipping terminal capable of handling vessels with capacity of about 70,000 deadweight tons.

Mechel produced slightly more than 15 million tons of coking coal in 2008, although it also has plans to increase this total significantly by launching the massive Elga deposit in the far eastern republic of Yakutia.

Raspadskaya, Russia's second-largest coking coal miner, produced 9.4 million tons last year, although output was severely hampered by the financial crisis. Quarterly output has since returned to precrisis levels.

Russia's other main producer of coking coal in the Arctic is Severstal, the country's largest steel maker, which operates mines in the former Gulag city of Vorkuta.