Updated April 14, 2008

   After the range of bad tries the Italian trader Coeclerici Coal & Fuels managed to purchase the coalmining asset in

the Kemerovo region. It is a Korchakolsky open-mine pit and North Kandysh mine; their cumulative reserves total 40 million tons of coal a year.

The transaction is estimated at $35-40 million. It is a small asset, and Coeclerici can either resell it in future or try to consolidate with the other local companies.

   As reported in the Kemerovo region administration, LLC Razrez Korchakolsky located in the south of Kuzbass has changed the owner.

It is the Italian trader Coeclerici Coal & Fuels. This company also controls JSC South Kuzbass industrial and transport management now, that maintains own deposits and is also engaged in coal supplies to South Kuzbass SDPP in Kaltan (owned by Mechel Group). Both enterprises have earlier belonged to Kuznetskaya Investment Construction Company (KuznetskInvestStroy).

   Some Kemerovo coal companies have confirmed the fact of transaction. In LLC Razrez Korchakolsky did not comment the situation, but specified that since April, 1 the company has the new director – it is headed by Vladimir Koba. KuznetskInvestStroy director general Alexander Eisenach refused to comment,

but did not refute the information about the asset sale.

In Coeclerici Coal & Fuels refused to comment.

   Razrez Korchakolsky acts as the operator at the section of the same field and at the section of North Kandysh open-pit mine. T steam coal is mined at the both sections, and the cumulative reserves exceed 40 million tons. According to the region administration data, the cumulative output totaled 388 000 tons of coal in 2007.

Until recently the open-mine pit belonged to KuznetskInvestStroy, which is controlled by Eisenach family. The company is engaged in industrial construction, including coal enterprises.

Coeclerici Coal and Fuels S.p.A. is the large coal trader.

In 2006 the company sold 4,5 million tons of coal.

    It is the first Coeclerici try to get assets in Russia.

In 2005 the company has applied for participation in "May" mine auction, but has not succeeded.

In 2007 Coeclerici got interested in CJSC Rassvet (Dawn), which was licensed to mine coal at the Rozhdestvensky coal section in the Prokopyevsk district, but the transaction was not concluded. The in formation that Razrez Korchakolsky owners look for a buyer appeared at the end previous year. Then it went about the company sale for $65 million.

   But Denis Gorev from Finam Investment Company estimates Korchakolsky at $35-40 million. The analyst explains that only 6 million tons from the company reserves are suitable to mine by means of the cheapest, open-mine method. Moreover, the new owner would have to settle the matters with the Federal Service for Environmental, Technological and Nuclear Supervision (RosTekhNdzor) and Federal Service for Supervision of Natural Resource Usage (RosPrirodNadzor): the agencies have claims concerning Korchakolsky. A landslide area near the open-mine pit has appeared in 2005 and it endangers the nearby Novokuznetsk-Biysk motorway.

   It is already the second purchase of the Kemerovo coal assets by the foreigners within the year.

Last week was closed the transaction about the sale of the Kemerovo Severstal mines to ArcelorMittal.

Nickolay Sosnovsky from SobinBank considers the interest to the coal assets logic in terms of the world prices rise. At the beginning of the year the steam coals have grown by 15%. "In my viewpoint, it is rather speculative purchase and its aim is subsequent resale", supposes Pavel Shelekhov Capital Investment Group.

Mr. Sosnovsky considers that Coeclerici studies the market for the future purchases.