Estonian firm wins key oil shale field ahead of new mine launch
State-owned Eesti Energia has transferred its entire Uus-Kiviõli oil shale mining field to Viru Keemia Grupp (VKG) to streamline operations, securing VKG's raw material supply for the next 30 years.
The Uus-Kiviõli fields have been disputed for two decades. Initially, the Ministry of the Environment granted the mining permit to Enefit Kaevandused, a subsidiary of Eesti Energia. VKG challenged the decision, and in 2017 the Supreme Court ruled in its favor. The companies then reached an agreement where two-thirds of the field belonged to Enefit and one-third to VKG.
VKG immediately began preparations to open a mine there, as its Ojamaa mine is nearing depletion and will close at the end of 2027. Enefit kept its share in reserve, as it had sufficient oil shale from the Narva quarry and the Estonia mine.
State expectations for Enefit's oil shale use have declined over time. Consequently, the company found it economically reasonable to focus production on the Estonia mine, deciding to close the Narva quarry and withdraw from Uus-Kiviõli.
"Our goal is to use the Estonia mine as a single source to supply both the oil industry and electricity generation. We have used it for decades, and there is still room for development and growth for many years," said Lauri Karp, chairman of the management board of Enefit Industry.
Enefit and VKG declined to disclose the purchase agreement price. According to Enefit, the company did not incur losses from the deal and avoided writing off its investments in Uus-Kiviõli, which amounted to up to €3 million.
For VKG, becoming the sole owner at Uus-Kiviõli not only triples its oil shale reserves but also grants greater operational freedom.
"Previously, we coordinated all construction activities with Enefit — various buildings, conveyors. Now we can proceed in the most rational way ourselves. And if you look at the mining field, our one-third share was geologically in the least favorable location," said Ervin Küttis, chairman of the management board of VKG Kaevandused.
"Now we can view the entire mining field as a whole and determine where to direct development, which will also improve efficiency," Küttis added.
VKG plans to open the Uus-Kiviõli mine in this June. Estimates suggest the oil shale there will last until 2058.
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Editor: Mirjam Mäekivi, Argo Ideon
