6 Aug 2009 16:57

Udokan copper project partners discussing funding with VEB, VTB

ANKARA. Aug 6 (Interfax) - The partners to the project to develop the giant Udokan copper deposit in Russia's Chita region are discussing funding with Russia's Vnesheconombank (VEB) and VTB , Sergei Chemezov, the head of the state Russian Technologies (Rostekhnologii) corporation, told reporters in Ankara.

Chemezov said the project would need $2 billion-$3 billion of investment in the next two or three years.

He said talks with the Russian banks, including VEB and VTB, were already under way.

The partners, which are Alisher Usmanov's Metalloinvest and Rostekhnologii, might start talking to western banks if the Russian banks are unable to provide funds, but no such talks are being held yet, Chemezov said.

Metalloinvest said it intended to team up with Rostekhnologii to develop Udokan after winning a tender for the license in September last year.

Metalloinvest had planned to start building the Udokan mine in 2010. Planned investment in the project exceeds 100 billion rubles. Usmanov has since said the timing of the construction and other terms of the license must be changed due to the financial crisis.

Metalloinvest is planning, according to the current terms, to start building a hydrometallurgical plant in the Chita region in 2010 and the first stage of the plant, capacity 150,000 tonnes of cathode copper or 12 million tonnes of concentrate per year, should be commissioned in 2014. Full design capacity of 474,000 tonnes cathode copper per year (36 million tonnes concentrate) should be achieved in 2016.

The Russian Federal Subsurface Resources Agency (Rosnedra) has said that as of January 1, 2008, Udokan contained B+C1 reserves of 14.43 million tonnes copper and C2 reserves of 5.52 million tonnes. The ores have a Cu content of 1.56%.