Mitsui, Russia's OPK May Develop Siberia Coal Mine

Mitsui & Co Ltd, Japan's second-biggest trading house, said on Monday it and Russian coal firm United Industrial Corp (OPK) would conduct a feasibility study on developing the Elegest coal mine in East Siberia.

The coal mine, owned by OPK's unit OPK Mining, is one of the largest undeveloped metallurgical coal mines in the world, with reserves of about 900 million tonnes, Mitsui said.

The project includes the construction of a 460km-long railway which would connect with the Trans-Siberian Railway, it said. The Russian Government has agreed to provide half of the funds required for the construction.

Mitsui said it had obtained first negotiating rights for a minority stake in the project in return for funding part of the study, which is slated to be completed by the end of 2009.

Alexander Gnusarev, chairman of OPK Mining, said in June that the company was considering floating or selling a quarter of its stock to a strategic investor and valued its coal business at $4bn. Coal prices have, however, tumbled in recent months.

By Yuko Inoue, Reuters