Russian Natural Resources Ministry insists on review of Norilsk-1 tender results
MOSCOW. Sept 7 (Interfax) - The Russian Natural Resources and Environment Ministry is insisting that the results of a tender for the southern section of the Norilsk-1 deposit be reviewed, the General Prosecutor's Office wrote in response to an inquiry by State Duma Deputy Raisa Karmazinnaya, the text of which has been made available to Interfax.
In the middle of June, the Russian Federal Subsurface Resources Agency (Rosnedra) awarded the southern portion of Norilsk-1, one of the three largest deposits of sulphide copper and nickel ore on the Taymyr Peninsula, to Russian Platinum, a member of Musa Bazhayev's Alliance Group. MMC Norilsk Nickel , which is the primary subsoil user on Taymyr, also competed for the deposit.
In June, Norilsk asked the Natural Resources and Environment Ministry to perform an independent analysis of its and Russian Platinum's projects to develop Norilsk-1 and to cancel Rosnedra's decision, as Norilsk believed it to have been biased. It also asked the Federal Anti-Monopoly Service (FAS) to check whether or not Rosnedra had complied with the law when it organized the tender for the deposit.
Meanwhile, the tender for the western flank of the Oktyabrskoye field was declared invalid, but Rosnedra deemed Norilsk's application - the only one received - not to have been in compliance with the terms of the tender.
At Prime Minister Dmitry Medvedev's order, the Natural Resources and Environment Ministry analyzed the tender applications and the technical and economic proposals of the participants.
The analysis established that the decisions for both tenders were made on the majority of votes, which came exclusively from representatives of Rosnedra and its subordinate organizations. Representatives of the Russian Natural Resources and Environment Ministry, the Russian Industry and Trade Ministry and the Krasnoyarsk Territory Natural Resources Ministry all voted against the decision.
In its letter, the General Prosecutor's Office wrote that according to the Natural Resources and Environment Ministry's conclusion, the technical and economic proposals of OJSC Artel Staratelei Amur (part of Russian Platinum) were not sufficiently justified, did not meet requirements for complete mineral resource extraction and rational subsoil resource use, contained violations of industrial safety standards and were fraught with risks of time lapses in field development.
In the Natural Resources and Environment Ministry's opinion, Norilsk's technical and economic proposals and design technology solutions feature a higher degree of elaboration, the document said.
By law, the decision to provide the tender winner with the rights to subsoil sections is made by the Russian government. In connection with this, the Natural Resources and Environment Ministry sent the relevant information to Medvedev on July 27 with the suggestion that he refuse to confirm the results of the tenders.
According to the General Prosecutor's Office, the tender results have not been confirmed by the government, and decisions on whether to issue licenses for the western flank of the Oktyabrskoye deposit and the southern part of the Norilsk-1 deposit have not been made.
Rosnedra and the FAS have said that they see no reason to review the results of the tender for Norilsk-1.
According to Norilsk, the company will be unable to process some 15-20 million tonnes of copper-nickel ore if it does not have the rights to the Oktyabrskoye western flank, and inability to develop the southern section of Norilsk-1 means the company will have to mothball a substantial portion of reserves at the adjacent Zapolyarny mine for a lengthy period and will entail additional geological exploration.
The southern section of Norilsk-1 had 78.012 million tonnes of B+C1 and 153.723 million tonnes of C2 ore listed on the state balance as of January 1, 2010. Estimated nickel reserves were 273,200 tonnes B+C1 and 578.1 million tonnes C2; copper - 378,100 tonnes B+C1 and 836,100 C2; cobalt - 12,718 tonnes (B+C1) and 23,244 C2; platinum-group metals 517.868 kg (B+C1) and 1.121 tonnes (C2); and gold 37.082 tonnes (C2). Nickel content at the section ranges from 0.41% to 2.67%, and copper content - 0.57% to 5%.