Russia’s Largest Copper Deposit to Start Excavation Work
Apr. 27 – After decades at a standstill, engineers and geologists of LLC Baikal Mining Company started excavations in Russia’s largest copper deposit of Transbaikalia Region (Zabaikalsky krai) in East Siberia and hope the project will secure the region’s prosperity in the future.
Russia’s mining and steel company Metalloinvest, together with state-run Rostekhnologii, will carry out the project, which will need around US$5.3 billion in investment.
Baikal Mining Company, Metalloinvest’s subsidiary, has been established for the development of the Udokan copper deposit in in November 2008.
Metalloinvest earlier said it intended to spend over US$3.4 billion on the development of the Udokan deposit. Rostekhnologii has not allocated any funds to the project development yet.
Metalloinvest, Russia’s largest producer of iron ore, is controlled by Russian billionaire Alisher Usmanov, co-owner of Arsenal soccer club and internet company Mail.ru.
Udokan is the third biggest copper deposit in the world, with estimated ore reserves of 1.375 billion tons, which is up to 60 percent of overall total copper reserves of Russia. Balance reserves are about 20 million tons of copper (average grade – 1.45 percent).
The copper reserves of the Udokan are estimated at 19.95 million tons. The deposit also has silver reserves of 11,900 tons, company web site says. The deposit is located in the Kalar District of the Transbaikalia, 30 kilometers from Chara rail station of the Baikal and Amur Railway Road. It is located in the mountains with no any infrastructure but extreme climatic conditions: permafrost and high seismic activity.
The deposit was discovered in 1949 and its reserves have been listed three times. Lack of infrastructure and energy grids made excavation not possible at that time. Later mining efforts stalled with the collapse of the Soviet Union.
The internal structure of the Udokan ore body is quite complicated, company specialists say, there is a close alternation of poor, average, rich ores and waste rock.
About 70 percent of Udokan ore reserves represent mixed type of copper ore which is classified as difficult for concentration. It is established that about 60 minerals are contained in the deposit.
The oxidation rate of Udokan copper ores is highly variable, which greatly affects the technological flowsheet for concentration.
According to the company’s experts, it might take four to five years to get from the exploratory phase to full-scale excavation.
According to the project plan, construction of the mining and processing plant will start at the end of 2012. The industrial complex will be designed to process 36 million tons of ore per year.
An annual production of the plant will amount to 474,000 tons of cathode copper and annual associated silver recovery will total 10 million ounces. The final products will be cathode copper of grade A under the classification of London Metals Exchange and Dore silver bars.
Metalloinvest has produced 35.1 million metric tons of iron ore concentrate in 2010, an 18 percent increase from a year earlier, and targets 38.5 million tons this year, Bloomberg reports.
The company may decide to hold an IPO in the second half of this year or in 2012, depending on market conditions.
“The project means more investments and new jobs. But it will also provide additional tax revenues into the entire region. And new social programs will be launched,” Andrey Prostakishin of the Zabaikalsky region authorities said to the Russia Today.
The Transbaikalia, located in East Siberia, is sparsely inhabited by a mostly urban (65.9 percent) population of 1,106,000. Transbaikalia borders on 868 kilometers with Mongolia and 998 kilometers with China.