Under the terms of the binding agreement, EVRAZ will provide up to RUB400m (up to approximately $12.4m) to VGOK to normalize the working capital of VGOK.

Located near the city of Nizhny Tagil, VGOK has three mines at the Vysokogorskoye, Yestuninskoye and Goroblagodatskoye iron ore deposits and owns ore processing facilities.

Expected to be completed during October 2013, the transaction will not affect VGOK’s production plans and workforce. Employing more than 4,000 people, VGOK has also mined one million tonnes of limestone.

EVRAZ Iron Ore Division and major projects vice president Marat Atnashev said that the VGOK sale is part of EVRAZ’s strategy in mining, to focus on large scale and low cost operations supporting the efficient vertical integration of the company.

"The sale of VGOK represents one step in the ongoing process of optimising our iron ore assets," Atnashev added.