Four missing as floods shut Evraz mine in Russia

Reuters News
Posted: Mar 27, 2013 5:53 AM

MOSCOW (Reuters) - Four miners are missing after water flooded a coal mine belonging to Evraz, Russia's largest steelmaker, and cut off production, the company said on Wednesday.

The accident could lead to a 15 percent fall in coal output for Evraz, undermining its self-sufficiency in coking coal, according to analysts.

Local authorities are investigating the cause of the flooding in Osinnikovskaya Mine in Siberia's coal-rich Kemerovo region that is owned by a subsidiary of Evraz, which itself is listed in London and is a constituent of the FTSE 100 index.

The steelmaker said the mine, which produced 235,000 metric tons (259,043 tons) of coal in the first two months of 2013, would use its reserves to compensate for the halt in production.

"The mine has sufficient coal reserves and while activities are suspended consumers will receive shipments from our warehouses," Evraz said in a statement.

Although mine safety has improved since the Soviet Union collapsed in 1991, fatal accidents are frequent in Russia's ageing pits.

"The flooding of the mine may reduce Evraz's self-sufficiency in coking coal to less than 100 percent," BCS analysts wrote in a note, calculating that the 1.4 million metric tons of coking coal Osinnikovskaya produced in 2012 accounted for around 15 percent of Evraz's total output.

Searches are continuing for the four miners still unaccounted for after 143 workers were told to evacuate the mine when the flooding occurred late on Tuesday, Evraz said.

Evraz shares traded down 0.5 percent in morning trade in London.

(Reporting by Andrey Kuzmin, Alessandra Prentice, Damir Khalmetov; editing by Douglas Busvine and James Jukwey)