Roman Trotsenko on the 18th June formalized the acquisition of 75 percent of shares in the Arctic Mining Company and intends to forge ahead with big plans for coal production on the tundra.
The businessman, one of Russia’s richest, plans to invest 33 billion rubles in the project, Forbes informs.
The Arctic Mining Company was formerly owned by Dmitry Bosov, the businessman that in early May this year reportedly took his own life. Bosov and his investment company Alltech had great plans for the project and originally intended to extract several hundred million tons of high-quality coal from his many license areas in Taymyr.
However, progress was seriously hampered by a law suit from Russian environmental control authorities and lack of funds, and in early 2020 Bosov announced that he was abandoning the project.
By that time, construction workers had been in the remote and vulnerable lands since 2016 to prepare for project launch. Reportedly, $86 million had been spent on developments.
Several million tons
According to Forbes, the business deal is based on a swop of assets where Trotsenko gets the Taymyr coal licenses and Alltech takes over full control over the Pechora LNG project.
Revised plans for the coal project includes a 1 million tons production in year 2023 and five million tons by 2025. About 13 billion rubles ($167 million) are to be invested in regional exploration and infrastructure development while 20 billion is to be spent on the coal pits. Trotsenko himself intends to cover about 30 percent of the investments, while the remaining sums will be based on bank credits.
The estimates are far more modest than the ones originally presented by the former owner. Dmitry Bosov intended to invest as much as $250 billion and reach a production of as much as 30 million tons already in 2023. The coal was long seen as a key share of the projected boost in shipments on the Northern Sea Route.
Associated with Rosneft
Roman Trotsenko is well connected with powerful people in both government and state companies. In 2009, he took over the reigns of the United Shipbuilding Corporation, a leading state shipbuilding company.
In 2012, he was appointed adviser to Igor Sechin, President of Russia’s biggest oil company Rosneft. Trotsenko reportedly especially advised Sechin on issues related to the company’s activities on the shelf.
Since then, he has been involved in business projects that in various ways are connected with the state oil company.
Both the Pechora LNG and the coal projects in Taymyr have a link to Rosneft.
The peninsula of Taymyr is not new to Roman Trotsenko. From before, he owns several coal licenses in the area. With his project company Severnaya Zvezda, the businessman has for several years planned the extraction and export of major volumes of coal.
Through his Severnaya Zvezda, Trotsenko owns the license to the Syradasayskoye coal field in Taymyr and project plans include several millions of tons exported from a new port terminal located near Dikson on the Kara Sea coast.
Reserves are estimated to 5,7 billion tons and annual production is to reach at least 10 million tons. Originally, production start-up was set to 2020.
The Syradasayskoye field is located about 120 km from the coast of the Kara Sea, not far from the license areas of Vostok Coal.
It is the Chaika terminal that will be centerpiece in the projected new infrastructure in Taymyr. The terminal will be located in the west coast of the peninsula and serve export shipments both to Europe and Asia. The same terminal is planned applied by Rosneft for its projected Vostok Oil project.
Russia goes for coal
Demands for coals are in steep decline in Europe and other parts of the world, but Russia still envisions a significant growth in its own production.
A new state program for coal development until year 2035 includes an increase in domestic output by up to 50 percent.
According to the program, up to 668 million tons of coal can be extracted by 2035, of which up to 392 million tons can be exported.
China and India are seen as key markets for the carbon-rich black rocks.
Related stories from around the North:
Arctic: Compilation: Mining and drilling in the Arctic, Eye on the Arctic
Finland: Finnish company joins mining project in Russian High Arctic, The Independent Barents Observer
Norway: Norway’s Equinor to drill new Arctic well in Barents Sea, The Independent Barents Observer
Russia: Russian company VostokCoal abandons major coal mining project in Arctic tundra, The Independent Barents Observer
Sweden: Swedish company LKAB targets emission-free iron ore mining around 2030, The Independent Barents Observer
United States: US sanctions against Chinese shipping company could hurt Russia’s LNG exports, The Independent Barents Observer