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The governor of a southwest Siberian region sent a request
The governor of a southwest Siberian region sent a request to Russia's natural resources ministry for the planned auction of a coal mine to be stopped, an administration spokesman said on Wednesday.

The move by Aman Tuleyev, Kemerovo Region governor, is over a record bid price of $573 million for the Uregolsky Novyi coal deposit, which was put up for auction April 25. The deposit has reserves estimated at 38 million tons.

"The holding of the auction is accompanied by gross violations of the law, nobody has checked the finances of the remaining bidders and whether they have the means to pay the multibillion sum to the federal budget," Tuleyev was quoted as saying.

The Uregolsky Novyi mine, which analysts say is only worth around 50 million rubles ($2 million), lacks infrastructure, which will need to be built, as well as investment in the mining and producing of the coal.

In comparison, proposed investment in the region's electricity facilities until 2012 stands at 2.3 billion rubles ($520 million).

The auction currently involves two little-known companies out of five initial bidders. One of them, Tulaincom, which Tuleyev said is "clearly affiliated" with a subsidiary of Mechel Group, one of Russia's leading mining and metals companies, made the final bid on Tuesday.

Tuleyev criticized the auction for being "absurd" and blamed the situation on Russia's Federal Mineral Resource Agency, Rosnedra.

Vladimir Kovalyov, deputy governor and a member of the auction commission, said earlier that the bidders should submit additional documentation confirming that have the funds by May 21.

However, Alexander Andreyev, head of the auction commission at Rosnedra, said earlier he had no authority to demand additional financial documentation from the bidders.

Russian Natural Resources Minister Yury Trutnev instructed on Monday Rosnedra's head Anatoly Ledovskikh to develop a mechanism to block auctions unless bidders have the funds to make one-off payments.

Kemerovo authorities asked Rosnedra to cancel the auction two days before the launch over reports of illegal coal production at the deposit.

Tuleyev has also appealed to the Russian Prosecutor General's Office, its investigation committee and other federal bodies to verify the information and take appropriate measures.


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