Novo-Orlovsky MPP in Trans-Baikal Territory resumes production - authorities

CHITA. July 7 (Interfax) - The Novo-Orlovsky Mining and Processing Plant (MPP), which is developing the Spokoyninskoye tungsten deposit, has resumed operations after a two-year halt, having undergone bankruptcy proceedings and a change of legal entity, the press service of the Trans-Baikal Territory regional authorities said.

"Our goal is to produce 100 tonnes of concentrate per month by September this year. Today, we are renewing our fleet of vehicles, have purchased equipment, and restarted the crushing section. The main problem is staffing," the press service quoted company CEO Yury Poplavsky as saying.

The plant has entered an active phase, with overburden removal and raw material extraction underway, Poplavsky said. Around 260 people are employed at the plant. The enterprise has purchased new equipment and updated its vehicle fleet.

"All efforts are focused on launching the processing plant, which is scheduled for July 20. This facility will become a key link in the production chain, enabling deep processing of extracted raw materials," the press service said.

At the same time, the arbitration case database shows that bankruptcy proceedings for CJSC Novo-Orlovsky MPP are still ongoing. On June 10, the court once again extended the procedure.

During the proceedings, the court rejected a motion from bankruptcy trustee Vadim Gubersky to hold individuals controlling CJSC Novo-Orlovsky MPP subsidiarily liable. These include beneficiary and former State Duma member Vadim Varshavsky (convicted of tax evasion and fraud, declared bankrupt) and company executive Valery Lukin. Previously, interim trustee Vyacheslav Kononov also named Moliren LLC as a controlling entity, since the company was the sole buyer of the plant's products, purchasing them under non-market conditions at significantly below market price.

The court agreed that Varshavsky was indeed the plant's beneficiary but ruled that Moliren was not affiliated with CJSC Novo-Orlovsky MPP. The court denied all requests for subsidiary liability, concluding that the beneficiary and executive had an obligation to file for bankruptcy but did not behave unreasonably, and that Moliren had purchased the product at a low but market-based price.

As reported, in February 2020, the Arbitration Court of Trans-Baikal Territory initiated supervision proceedings for CJSC Novo-Orlovsky Mining and Processing Plant following a petition from Trust Bank. In July 2022, bankruptcy proceedings were initiated. As of mid-July 2022, the company's creditor debt totaled 1.062 billion rubles.

Based on the creditors' decision, the bankrupt CJSC Novo-Orlovsky MPP established a subsidiary, JSC Novo-Orlovsky MPP, in the summer of 2022, with a charter capital of 1.152 billion rubles. The charter capital of the new legal entity corresponds to the value of the property transferred from the CJSC - 1,900 movable and immovable assets, 1.5 tonnes of tungsten concentrate and lease rights to land plots. The licenses previously held by the CJSC for subsoil use, including for the Spokoyninskoye tungsten deposit, were also re-registered to the JSC.

In the summer of 2023, the plant's majority secured creditor Moliren acquired 100% of shares in JSC Novo-Orlovsky MPP at auction. Moliren, which had 56.5% of the MPP's shares as collateral, purchased the entire 100% stake for 175 million rubles. The starting price was 1.037 billion rubles, meaning the final sale price was six times lower. The auction was held in the form of a public offering.

According to the Unified State Register of Legal Entities, Moliren was founded in Moscow in 1998. Through a number of legal entities, it is equally owned by St. Petersburg businessmen Eduard Martyanov, Vladimir Shekhovtsov, Ruslan Dzhamaldinov and Vyacheslav Grigoryev. Their largest joint asset is NKM Nord, a supplier of non-ferrous metals and ferroalloys used for steel alloying and manufacturing for Russia's leading metallurgical enterprises. Moliren specializes in hydrometallurgical processing of heat-resistant alloys to obtain rhenium acid, ammonium perrhenate (ammonium rhenate), nickel and cobalt oxides and hydroxides, and tantalum concentrate. It produces ferromolybdenum, ferrovanadium, ferroniobium, ferrotungsten, rhenium and metallic chromium.