Russian diamond mining company ALROSA and EVRAZ plc signed an agreement to sell the diamond miner’s controlling stake in OJSC Timir to EVRAZ.

The transaction amounts to RUB 4.95 billion (about $160 million) to be paid in several installments. At completion, EVRAZ will receive 51% stake in Timir, OJSC Alrosa will own 49% minus one share and Vnesheconombank (VEB) will receive one share.

The transaction was approved by the supervisory board of ALROSA in September 2012.

“The Timir project has obtained a strategic investor represented by EVRAZ, which has extensive experience in mining and processing of iron ore. The emergence of such a partner as EVRAZ will boost Timir progress. ALROSA will continue to participate in this project and finance the development of the deposits in accordance with its share in the capital,” Fyodor Andreev, president of ALROSA, said.

OJSC Timir currently holds licenses for four iron ore deposits (Tayozhnoye, Desovskoye, Tarynnakhskoye and Gorkitskoye) in the southern part of Yakutia in Russia with total mineral resource base under the Russian geological classification of 3.5 billion metric tons (Russian geological categories of A+B+C1).

The first phase of the Timir project involves development of the Tayozhnoye deposit with total mineral resources under the Russian geological classification of 341 million mt of iron ore (Russian geological categories of A+B+C1) and grades of 38%–40% Fe.

The mining capacity of the Tayozhnoye open pit is estimated at 15 million mt/y of iron ore. Total investments in the first phase of the Timir project are estimated to approach $1.8 billion during the period 2013–2018.

The Tayozhnoye deposit is located 150 km north of the city of Neryungri, an industrial center in the southern part of Yakutia, and near existing infrastructure—railroad, power grid and a paved road.

According to ALROSA, implementation of the Timir project should eventually create 11,000 new jobs including 4,000 positions at the Tayozhnoye ore mining and processing plant.