The companies are targeting the Ekubastuzskyoe coal field in the area of the Bogatyr and Severny coal mines in the Pavlodar region.

Total coal reserves of Bogatyr and Severny are estimated at 4.5 billion tonnes. Coal production totals 42Mt per annum, which is about 45% of all coal produced in Kazakhstan. The parties are intending to develop mining capacity to 60Mtpa.

Rusal will transfer a 50% shareholding in its Bogatyr and Severny coal assets to Samruk Holdings. The assets were transferred to Rusal by Access Industries as part of the recent merger of Rusal, SUAL and Glencore.

Coal produced by the joint venture will serve the Kazakh and Russian power and steel markets.

Rusal and Samruk also plan to examine opportunities for the development of the Kazakh energy sector.

"A partnership with Kazakhstan is a key milestone in the development of our company as a diversified energy and metals corporation," said Rusal chief executive Alexander Bulygin.

"Our participation in the development of coal and energy projects in Kazakhstan will allow us to expand our energy base and realise new projects, including the extraction of new kinds of raw materials and metal production."

Samruk chairman Kanat Bozumbaev added the joint venture signalled Kazakhstan Government support to foreign investors.