Uus-Kiviõli mine to cost oil shale company VKG €75 million
Today, Viru Keemia Grupp (VKG) laid the cornerstone for the Uus-Kiviõli mine. Instead of the initially planned €110 million, the company says construction of the mine will cost €75 million.
Today, VKG held a topping-out ceremony for the main building of the Uus-Kiviõli mine, combining it with a cornerstone-laying in line with new traditions. The building is set to be completed by the fall, while the mine is expected to begin operating at larger capacity as early as June.
At the end of 2023, Viru Keemia Grupp (VKG) estimated the construction cost of the Uus-Kiviõli mine at €110 million. According to current calculations, it will cost €75 million.
According to VKG CEO Ahti Asmann, when opening a mine, it is never clear what conditions lie underground.
"We feared something a bit worse, although mining in Uus-Kiviõli is certainly more difficult than in Ojamaa. At the same time, as we made investments, we were also able to generate some output and overall this has brought the cost down somewhat," Asmann said.
Most of the Uus-Kiviõli mining field previously belonged to Enefit Industry, a subsidiary of Eesti Energia. At the end of last year, the state-owned company sold the mining permit to VKG, which had previously owned one-third of the field.
Thanks to owning the entire mining area, VKG can now organize underground work more smoothly and logically. In addition to reducing construction costs, this has also made it possible to optimize labor expenses. Initially, the Uus-Kiviõli mine was expected to employ 590 people; under current plans, the workforce will be 70 fewer.
According to Ervin Küttis, head of VKG subsidiary VKG Kaevandused, personnel costs play a very important role in the cost price of oil shale.
"We are constantly working on optimization. However, under the new mining plan, haulage routes and conveyors are shorter and that is where efficiency must come from," Küttis said.
Until the end of next year, the Uus-Kiviõli mine will supply raw material to VKG's oil plants together with the Ojamaa mine, which is beginning to be depleted. According to VKG estimates, the oil shale reserves at Uus-Kiviõli will be sufficient for its shale oil industry until 2058.
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Editor: Marcus Turovski, Märten Hallismaa
