4th Apr 2007 08:02
OAO Severstal04 April 2007 SEVERSTAL Mira str. 30, RU-162600, Cherepovets, Vologda region, RussiaPhone: +7 (8202) 53 14 18, fax: +7 (8202) 53 12 56, www.severstal.com For Immediate Release4 April 2007 Karelsky Okatysh, JSC, part of Russian Mining Division of OAO "Severstal" todayannounces that it has begun to evacuate and process iron ore at its new Korpangadeposit which has reserves estimated at 320 million tonnes. At a total of over US$ 100 million, the integration of Korpanga is KarelskyOkatysh's largest investment project to date. Over the last four years, thecompany has invested some US$ 54 million in the new operations. This year thecompany will invest US$10 million with a further US$ 38 million expected to beinvested before 2013. Up to 3 million tonnes of ore will be processed by the end of the year, withfuture annual capacity likely to increase to up to 10 million tonnes. Victor Vasin, Director General, Karelsky Okatysh, said: "The start of oreextraction at Korpanga means that we are able to maintain, and even increase,our overall current rates of production at a time when the output from ourexisting mine at Kostomuksha is actually in decline. This year's mining of 28million tonnes of ore will require the evacuation of 40 million m3 and willallow us to increase the production and sales of pellets up to 10 milliontonnes. All three figures are the highest in the company's history and would notbe possible without the Korpanga deposit. In the long term we will increase thescale of our ore mining and the volume of pellet production". The infrastructure required at the site of the deposit includes 20 kilometres ofroads and railway lines which link the new deposit to the concentration plant tosupply the plant with ore for the production of iron ore concentrate and ironore pellets. Korpanga is located 5 kilometres north of the company's current core mineralbase, Kostomuksha and features better ore in terms of recovery ratios. TheKorpanga deposit was discovered in 1952 with geological exploration started in1970 and a detailed survey completed in 1981. Following a competitive tender,Karelsky Okatysh was granted the right to develop Korpanga in July 2001 by theNatural Resources Ministry of the Russian Federation and the Government of theKarelian Republic. The license is valid for 20 years. An independent study by Branan, commissioned by the European Bank ofReconstruction and Development, and consultation with scientists andenvironmentalists has concluded that the commissioning of the Korpanga depositwill have no impact on the environment. NOTE TO EDITORS: In the present moment the core mineral base for Karelsky Okatysh, JSC is theKostomuksha Iron ore Deposit. It had been surveyed down the 600 meters. Thereserves of magnetite ore are estimated to be around 1 million tonnes. Thedeposit is conditionally divided into 4 areas: Northern - 1, Northern - 2,Central and Southern. In terms of mining conditions the Central Area isconsidered to the most favorable - it contains approximately 70% of entireDeposit's reserves and thickness of the ore body reaches 280 meters v/s 40-80meters at other Areas. Thickness of loose sediments of the Central Area is 8meters in the average and denoted by relatively low waterlogged. These factorshave determined the development of the Deposit within the pit shell of theCentral Area. In 1983 operations started at the Southern and in 2004 at ehNorthern - 2 Areas. Enquiries: Andrey Zamula,SpokesmanKarelsky Okatysh, JSC+7 (81459) 3-55-53, [email protected] This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
SVST.L