A conflict is burning around the new coal terminal “Lavna” which is being developed at the northern port of Murmansk in Russia. Swiss-based MERCURIA Energy Trading S.A., one of the largest global coal traders, seems to be kicked out of the project and replaced by an unknown local entity associated with the owner of Russia’s major mining company.
In a letter addressed to the Russian Transport Minister Yevgeny Ditrikh on 15 October, Mercuria confirms its interest in the project and expresses its dissatisfaction with the current situation, writes the Russian business daily Kommersant.
The letter says that Mercuria has been participating in the project together with the State Transport Leasing Company (STLC) since June 2017, when the companies signed an agreement on cooperation and joint realization of the Lavna project at the St. Petersburg International Economic Forum. In February 2018, Mercuria signed an exclusive agreement to reserve the infrastructure capacity of 18 mln tons at the future terminal. However, according to Mercuria’s management and investors, the trading company has never received any response from the Russian authorities on its official request to participate in the project as a foreign investor. Mercuria’s status of partnership with STLC is not clear either.
At the same time, Mercuria has been informed about the intention of STLC to develop the project together with another investor. Now Mercuria requests the Transport Minister to meet and discuss the situation.
Commenting on the issue, STLC says that in October 2017, the company’s Board of Directors approved the sale of the 75% stake in Lavna to Mercuria, as per the order from the Transport Ministry. But the trader has not yet provided the approval of the deal by the Russian Anti-Monopoly Service (FAS).
On 1 October 2018, Russia’s government issued a decree ordering to sign a concession agreement with Commercial Sea Port “Lavna”to construct and operate the Lavna terminal. And as it has become recently known, the project will be developed by Andrey Bokarev, co-owner of Ural Mining and Metallurgical Company, the second largest copper producer in Russia, who already owns 5% in the project. His company “Biznes-Globus” applied to FAS to acquire 70% in Lavna on 6 September 2018 and got the necessary approval already on 27 September.
Some sources of Kommersant say that Mercuria applied to FAS for the similar approval in June but with no result so far. However, this information is not confirmed by Mercuria.
As we wrote earlier, Lavna is one of the ambitious green field port projects in the north of Russia. The RUR 24 bln (about USD 370 mln by current rates) coal handling deep-sea terminal (draft 20m) with 2 berths of total length of 636m will have a designed capacity of 18 mln tons per year. The Phase 1 with the capacity of 9 mln tons is to be put into operation in December 2020.