Gunvor Picks Up Prokhorov Coal Deposit

Gunvor International, the closely held energy trader, agreed to acquire a Siberian coal deposit from Mikhail Prokhorov in a bid to curb its reliance on oil, according to two people with knowledge of the sale.

Gunvor affiliates will buy 51 percent of Kolmar, which owns the deposit, from Prokhorov’s InterGeo mining company, said the people, who declined to be identified before an agreement is announced. The deal may be valued at about $300 million, one of the people said.

Gunvor, which handles about a third of Russia’s seaborne oil exports, formed a new division in 2009 to diversify into global coal trading, according to its web site. Demand for coal has gained as growing Asian economies seek more of the steelmaking material, pushing up prices. Kolmar has about 400 million tons of coal reserves, mostly in the Sakha republic.

InterGeo and Gunvor may complete the terms of the agreement by the end of this week, the people said.

Officials at both companies declined to comment and asked not to be named.

Gunvor’s affiliates and founder Gennady Timchenko don’t control any coal assets in Russia, where their business has been focused on the oil and gas industry. Units of the Geneva-based company, which posted sales of $65 billion last year, hold stakes in gas producer Novatek, pipeline builder Stroitransgaz and the Lagansky oil field.

India’s NMDC, Asia’s third-largest iron-ore producer, was earlier in talks with InterGeo to buy Kolmar for $400 million, Kommersant reported in October.

Leave a comment