Evraz has had its memory refreshed

Vladimir Putin has urged the company to go back to the steel plant project in Yakutia.
There has been revival of the metallurgical market, which enabled many Russian steelmakers to return to profit, may result in problems for Evraz. Vladimir Putin clearly reminded us of the commitment to build the plant in Yakutia worth $ 4 billion. Co-owner of Evraz agreed to "take another look" at the project, but the prospects of it still does not see what agree and analysts.

Yesterday at a meeting on the state support of priority investment projects and territories in the Far East (see. P. 2) President Vladimir Putin invited the head of the board and co-owner of Evraz Alexander Abramov return to the construction project in Yakutia steel plant-based iron ore deposits of JSC "MMC" Timir "" (51% in Evraz, 49% minus 1 share - ALROSA).

Balance reserves of "Timir" - about 5 billion tons of iron ore. Originally, plans for their development involves the construction of two GOKov a total capacity of 18 million tonnes of concentrate per year and Neryungri Steel Plant (capacity in the first phase of 2.8 million tons per year, the second - 6.1 million tonnes). Investments primarily evaluateds to 134 billion rubles. Alexander Abramov, said that in 2008, when preparing the feasibility study, it seemed attractive. But in 2011 the participants of "Timir" asked Rosnedra removed from the terms of the obligation of licenses for the plant "in order to save $ 4 billion."

But to deny the president the businessman could not, saying that the company is ready to "once again make a feasibility study in more detail, or maybe updated for today." "We look again and again reported the results of the government - promised on.- If we are wrong, and why not, but today the situation is a little reassuring to say the least." Vladimir Putin, however, not too insisted, stressing that "threats and never will be." However, the president added, "there are some rough edges with the license, arising from the fact that it provides for the construction" (construction of the plant was due to start until May 2014). The license "has been amended," says the source "b". The Ministry of Natural Resources and Evraz is not comment.

The question of the plant could be lifted at the request of the authorities of Yakutia, which has repeatedly urged not to delay or shortaschat project believe Sources "Kommersant", close to the project and familiar with the meeting. Contact Yakut officials yesterday failed, representatives of deputy prime minister in the Far East, and Yuri Trutnev "South Yakutia Development Corporation" (coordinator of large investment projects in the region) have not responded to calls "b". In Evraz only speak of "constructive dialogue with local and federal authorities." "Having bought in 2013 from ALROSA 51% of" Timir ", the company explained that due to a significant deterioration in market conditions the project market has been divided into phases, the first phase will be to develop deposits Taiga - According to the company to discuss the next steps is premature.".

Oleg Peter and Paul from the BCS estimates the investment in the construction of a steel plant with capacity of 3 million tons in the amount of up to $ 2 billion (taking into account the infrastructure and climatic conditions in Yakutia). But, analysts say, in the region right now there is no demand for the metal, and export it to Asia-Pacific countries benefit only in the case of steel products prices marked increase, iron ore and coal, which will allow the Russian prodrivers equal in cost with Chinese steelmakers (there are cheaper products, such as fittings, 12%). Many Chinese plants are located near the port, while the future of the plant "Timir" to the Far East ports need to reach more than 2 thousand. Km, adds Sergey Donskoy of Societe Generale. As a result, the analyst believes, the government is now trying unsuccessfully to save the "Mechel" can get just another major problem the company "with all its problems." However, according to Mr. Don, the owners of Evraz (Roman Abramovich, Alexander Abramov and Alexander Frolov) - good and lobbyists are likely to achieve significant delay construction of the plant.