En+ Group and Shenhua to Jointly Develop Zashulanskoye Coal Deposit in Transbaikal, Russia

The company’s bid at the auction held by local authorities amounted to RUB 246.9 million (US$7.4 million).

The Zashulanskoye deposit is estimated to contain 252 million tons of C1 high calorie and low sulphur coal.

The joint venture plans to build an open pit mine with up to 6 million metric tonnes per annum in capacity. The coal produced will be used for electric and thermal power generation in the Transbaikal territory, as well as exports to China.

The partners also plan to build an approximately 100km motor road to access the nearest railway station, utility lines, a fly-in-fly-out camp, permanent residences for key personnel, as well as social facilities.

En+ and Shenhua are prepared to spend more than RUB 30 billion (US$ 902 million) in estimated investments, which they believe will create over 1,000 jobs. The partners will also explore the potential to build an underground mine to recover coal buried in deeper layers.

The joint venture is scheduled to have the exploration completed and approved by the authorities within the next two years in order to confirm the reserve estimate. The mine is expected to be operable in 2018 and to reach its full capacity in 2021.

Maxim Sokov, First Deputy CEO of En+ Group, commented: “East of Russia possesses huge coal resources and China is the world’s largest coal consumer, a perfect match. I believe the Zashulanskoye deposit, our pioneer joint project with Shenhua, is the first step of a very long and fruitful strategic partnership which will be beneficial for our companies and countries”.

“The Zashulanskoye deposit development is something we are starting from the scratch. I am confident that Vostsibugol and Shenhua will unite their resources, expertise and competencies to make a breakthrough in coal mining in Russia”, said Evgeny Masternak, En+ Group Managing Director (Coal Business), and CEO of Vostsibugol.

“The En+ Group partnership is Shenhua’s first coal project in Russia, and it is an important step towards greater Sino-Russia cooperation in coal. Shenhua is well-equipped to cooperate with our Russian partner to achieve a relationship that will be of mutual benefit. We will adhere to the highest standards of safety, cost-effectiveness and environmental protection, so that the local community can enjoy a positive working and living environment, and the economic development of the region will prosper,” said Junjie Shao, Chairman of Shenhua International Ltd.