ALROSA and EVRAZ plc signed an agreement to sell the diamond miner’s controlling stake in OJSC “Timir” to EVRAZ.

The transaction amounts to RUB 4.95 billion (about $160 million) to be paid in several instalments. At completion EVRAZ will receive 51% stake in Timir, OJSC “Alrosa” (“Alrosa”) will own 49% minus one share and Vnesheconombank (“VEB”) will receive one share.

The transaction was approved by the Supervisory Board of ALROSA in September 2012.

“The Timir project has obtained a strategic investor represented by EVRAZ, which has extensive experience in mining and processing of iron ore. The emergence of such a partner as EVRAZ will boost the Timir progress. ALROSA will continue to participate in this project and finance the development of the deposits in accordance with its share in the capital,” Fyodor Andreev, President of ALROSA, said.

OJSC “Timir” is currently holding licences for 4 iron ore deposits (Tayozhnoye, Desovskoye, Tarynnakhskoye and Gorkitskoye) in the southern part of Yakutia in Russia with total mineral resource base under the Russian geological classification of 3.5 billion tonnes (Russian geological categories of A+B+C1).

The first phase of the Timir project involves development of the Tayozhnoye deposit with total mineral resources under the Russian geological classification of 341 million tonnes of iron ore (Russian geological categories of A+B+C1) and grades of 38-40% Fe. The mining capacity of the Tayozhnoye open pit is estimated at 15 million tonnes of iron ore per annum. Total investments in the first phase of the Timir project are estimated to amount to approximately US$1.8 billion during the period from 2013 to 2018.

The Tayozhnoye deposit is located 150 km north of Neryungri city, an important industrial centre in the southern part of Yakutia, and close to the existing infrastructure – a railroad, power grid and a paved road.

The implementation of the whole Timir project should eventually create 11,000 new jobs including 4,000 positions at the Tayozhnoye ore mining and processing plant.