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Russian coal producer Tigers Realm Coal (ASX:TIG) took off in early trade after it completed the first stage of a $US30m capital raising.

The bulk of the equity raising, around $US20m, is being spent on the development of its coal handling and preparation plant (CHPP) in Russia.

The company is well placed to benefit from a change in China’s coal purchase patterns towards Russian coal from Australian product.

Tigers Realm ships product from Beringovsky port on the Pacific Ocean, and its Amaam North mine is located 37km inland by road.

The coal producer has an established customer base in Japan, China and Korea, and 70 per cent of its product is thermal coal and 30 per cent coking coal.

Cash costs for the miner are $US68 per tonne at Beringovsky port for washed, semi-hard coking coal product.

Once the CHPP is operational, Tigers Realm will be able to produce more coking coal which fetches higher prices than thermal coal.

The coal washing plant is expected to become operational in Q3 2021, with sales of washed coal starting in 2022.

Production from the company’s Russian coal mines is targeted at 1.2 million tonnes in the years 2022 and 2023, compared with 750,000 tonnes in 2019.

Institutional investors pledged $US12.7m ($17.2m) in the capital raising priced at $0.008 per share.

The offer opens to retail investors next week and closes in early January.

“Tigers Realm Coal has transformed itself from an exploration asset into a fully equipped and growing premium coal asset, poised to maximise production and sales capacity,” said the company in a December presentation.