Azerbaijan, Baku, Oct. 11/ Trend, E.Ostapenko/
The coal giant Eurasian Natural Resources Corporation (ENRC) will purchase the remaining 75 percent of shares of the Shubarkol company, one of the biggest thermal coal producers in Kazakhstan, the company reported on Tuesday.
ENRC, which currently owns 25 percent of Shubarkol's shares, announced its directors have unanimously approved to exercise rights to acquire 2,638,103 outstanding shares for up to $600 million, plus assumed debt of $50 million.
Shubarkol's coal output was approximately 6 million tons in 2010, accounting for approximately 5.4 percent of Kazakhstan's total coal production. As of 1 Jan. 2011, Shubarkol's proved and probable coal reserves totaled 326.2 million tons. Measured and indicated coal resources (inclusive of reserves) were 1,378 million tons and inferred coal resources -192 million tons.
The acquisition will be performed through the Kazakhstan Stock Exchange in an Open Trade.
The acquisition enables ENRC to implement its strategy of sustaining its low cost operations and consolidates its position in one of ENRC's preferred commodities in Central Asian region. With the inclusion of Shubarkol, ENRC's coal production capacity in Kazakhstan will exceed 25 million tons of coal per annum.
In addition, the acquisition enhances the company's position as one of Kazakhstan's leading coal producers, providing further product and customer diversification in its Energy Division, as well as a significant increase in the Group's coal reserve base in Kazakhstan.
"This is an important strategic acquisition which secures reliable access to the supply of relatively high quality and low-cost thermal coal. Our increased coal production capacity in Kazakhstan, which will exceed 25 million tons per annum, will support our existing operations and expansion plans. This will also us to maintain our advantageous low-cost production position," Chief Executive Officer of ENRC Felix J. Vulis said.
ENRC is a leading diversified natural resources group, performing integrated mining, processing, energy, logistics and marketing operations.