Russian metal company Mechel has bought the world’s largest untapped coal field in the Russian Sakha Republic at a Russian government auction. Mechel’s main contestant, Arcelor Mittal, was earlier denied the opportunity to participate in the auction.
The starting price for the Elga field, which holds reserves of more than 2.5 billion tons of hard coking coal, was $1.8 BLN. It went for $ 2.3 BLN. The winner will also have to invest another $3 BLN to build a railway and other infrastructure. But experts say the owner will recoup the investment by selling coal abroad. Earlier, Mechel bought another large coal asset – Yuzhny Kuzbass – the second coal producer in Russia. The company is keen to diversify its business and develop its energy interests.