Severstal mining unit wins Russia iron ore licence

MOSCOW, Oct 17 (Reuters) - Karelsky Okatysh, an iron ore mining subsidiary of Russian steel maker Severstal (CHMF.MM), has won a 20-year licence to explore and develop a deposit in northwest Russia with estimated reserves of 80 million tonnes.

Karelsky Okatysh said on Wednesday it won an auction the previous day for the South Korpangsky area of the Korpangskoye iron ore deposit. The average iron content in the ore exceeds 27 percent, the company said in a statement.

The company plans to begin development of the western area of the South Korpangskoye deposit by 2010. Ore reserves in this section are estimated at 15 million tonnes and the company anticipates 2.0-2.5 million tonnes per year of ore production.

Severstal's mining arm, Severstal Resurs, is Russia's second-largest producer of iron ore pellets and produced 9.5 million tonnes last year.

Karelsky Okatysh, meaning Karelian Pellet, is based in the northwest of Russia. It supplies pellets to Severstal's main steel mill in the city of Cherepovets and also counts Anglo-Dutch steel maker Corus among its customers.