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Investor Plans New Port For Coal on Barents Sea

ST. PETERSBURG — Russia is set to build a new export terminal worth $300 million to $500 million and capable of shipping 18 million metric tons of coal a year via the Barents Sea, the head of the Lavna Trading Port Company said Monday.

The new port is expected to provide a cheaper path to Europe and beyond for Kuzbassrazrezugol, Russia's second-largest steam coal miner, commonly known as KRU.

"The Lavna sea trading port has all the documents required for the construction of the port," Sergei Kropotov said, adding that the new terminal would serve Europe, the United States and Canada.

Should there be a need in the future, Lavna could eventually increase shipments to 36 million tons per year, he added.

Construction of the three-phase project will start in 2012, and the first phase, shipping 6 million tons of coal, will be completed by the end of 2014, said Igor Rusu, head of state agency Rosmorport. He did not give a target date for the 18 million tons.

KRU and the Siberian Business Union, a transport-to-radio conglomerate, each hold 50 percent of the Lavna project.

The terminal will be built in the Kolsky Bay of the Barents Sea — itself an arm of the Arctic Ocean — which lies to the north of Russia and Norway.

The bay is deep and does not freeze, meaning that there will be no restrictions on the size of ships, Kropotov said.

"Thus the terminal in Lavna will allow a saving of $2 to $4 per ton of coal on the shipments, compared with all other northwestern ports in Russia and the former Soviet Union," he added.

Currently, the shipment of coal from Murmansk costs exporters around $11 to $14 per ton, sources say. Murmansk currently works only with Russian companies SUEK and Mechel, as well as Italy's Coeclerici.

KRU, which has said it expects to export 24 million tons of coal this year, declined to comment on the port plans.

In 2009, KRU exported about 5.5 million tons of coal via the Vostochny port on the Pacific, and another 12.6 million tons through the Baltic ports of Ust-Luga, Riga and Tallinn.

The company exported another 5.8 million tons of coal through the Black Sea ports of Taganarog, Tuapse and Yuzhny.

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