* Deal will help SUEK remain competitive
* Rival exporters building cape port at Lavna
(Adds SUEK confirmation of deal)
By Jacqueline Cowhig
LONDON/MOSCOW, Feb 22 SUEK,
Russia's largest steam coal miner, has bought a 24.9 percent of
voting shares in the country's biggest Arctic port Murmansk,
SUEK said on its Russian website on Wednesday.
Earlier sources close to the deal said SUEK had taken a
minority stake of 24.9 percent, contradicting Russian press
reports on Tuesday that the coal firm had bought either the
whole port or a smaller shareholding.
SUEK's minority stake will enable it to remain competitive
against rival exporters developing a similar sized cape port on
the other side of the bay from Murmansk at Lavna, industry
SUEK has not revealed what it paid for the Murmansk stake
but the Russian press on Tuesday reported a price tag of $260
SUEK is not the only Russian coal exporter looking at
investment in Russian ports, to move away from more expensive
terminals in Latvia and Estonia which are still being used,
although as little as possible.
The port was not immediately available for comment.
There is enough port space in the St Petersburg area but
larger-scale ports would be a cheaper, more efficient option and
the government wants investment and job creation in regions like
Murmansk, the industry sources said.
"If you buy into a port and can get lower port charges you
could recoup what you paid over several years. With cash costs
of $90 a tonne, every dollar counts," one senior industry source
"I don't think they've (SUEK) bought all of Murmansk port
-they should, it makes sense but there are other companies also
looking, involved," another said.
Prompt thermal coal into Europe is currently trading at
around $96.00 a tonne delivered, leaving Russian exporters an
extremely slim margin, thanks to the plunge in freight
The 12 million tonnes a year Murmansk Commercial Sea Port
(MCSP), on the Barents Sea in the Arctic Circle is an ice-free,
key export point for coal to Europe and may have potential in
the longer-term for shipments to China.
It is controlled by a group of private investors while the
Russian government retains a 25.5 percent stake.
However, MCSP is on the government's 2012 privatisation
programme. The state's shareholding will be auctioned but the
timing has not been announced.
Rival coal exporters Kuzbassrazrezugol and the diverse SDS
Group owned by Mikhail Fedyaev and Vladimir Gridin who are
involved in the development of Lavna port, are expected to shift
all or most of their coal from Latvian and Estonian ports to
Lavna and other Russian terminals.
Lavna exporters will be able to set their own port charges
low because they own the port, industry sources said.
Rail tariffs have been set lower on routes to Russian than
Baltic ports for several years and this trend is likely to
continue although tariffs have crept steadily higher on average,
(Additional reporting by Olesya Astakhova, Denis Pinchuk and
Liza Dobkina; editing by James Jukwey)