Evraz: drop in quotation was short-term

Depositary receipts issued on Evraz Group’s stocks sidestepped a sharp decline in LSE trading Tuesday notwithstanding news about an accident at the Ulyanovskaya Mine. The mine is owned by Yuzhkuzbassugol, which, in turn, is 50% controlled by Evraz.

Although trading kicked off with a 10% slide to the downside, as of 2 pm Moscow time the metal holding’s GDRs were trading at $31.18 or 1.8% lower than Monday’s close.

For the record, methane exploded at the Ulyanovskaya Mine, operated by Yuzhkuzbassugol, the day before which, according to the most recent data, claimed the lives of 104 miners. All in all, 203 workers were in the mine at the time of the blast.

The despite such tragic consequences, this incident will have no fundamental impact on the investment appeal of Evraz stocks, which was vindicated by an upturn in the wake of morning losses. The Ulyanovskaya Mine supplies to the holding’s concerns some 1.5 mn tn of coal concentrate a year and Evraz could easily offset the loss of such a minor amount of coal deliveries.