Two at Udokan

The list of applicants for the development of the field has been left by the structure of "Basel"

The closer the deadline for the competition for the Udokan copper deposit - the largest in Russia and the third largest in the world - is, the fewer people want to participate in it . The first “refusenik” was Mikhail Prokhorov’s Onexim, which left the race due to a conflict of interests among Norilsk Nickel shareholders. Later, the nickel giant itself announced the withdrawal of its application . Yesterday, they were joined by the Sorsk Mining and Processing Plant, a structure of the resource division of Oleg Deripaska’s Basic Element. Sorsk Mining and Processing Plant announced the “economic inexpediency” of independent participation in the competition. It is interesting that the owners of all the companies that refused the competition are shareholders of Norilsk Nickel and are in conflicting relationships.

The structure of Basel was previously considered one of the main contenders for Udokan. Experts said that Mr. Deripaska needs this asset, which is close to Norilsk Nickel’s business, more than ever, because winning the competition could add arguments for him to merge with the nickel company. However, recently Mr. Deripaska has repeatedly said that he does not intend to merge with Norilsk Nickel, at least for now, therefore, according to analysts, the desire to participate in such a costly field has disappeared.

Now there are only two contenders for victory left: the Russian Copper concern (which includes Russian Railways, UMMC and Vnesheconombank) and the alliance of Mikhailovsky GOK (part of Alisher Usmanov’s Metalloinvest holding) and Russian Technologies. However, as stated by the head of Russian Technologies, Sergei Chemezov, in accordance with the agreement signed in July, a joint venture between the parties will be created only if the Mikhailovsky GOK wins the competition. Chairman of the Board of Directors of Norilsk Nickel Vladimir Potanin also did not rule out that if after the winner is determined, an offer is made to him to participate in the project, it will be considered. However, Mr. Chemezov then emphasized that Norilsk Nickel could become a partner in the tandem of Russian Technologies and Metalloinvest if it included in the joint venture the rights to large copper deposits in the Trans-Baikal Territory, where Udokan is located. There was no official reaction from Norilsk Nickel at that time, but experts believed that the company’s board of directors would most likely approve it.

The tender for the development of the Udokan field, the deadlines of which have already been postponed twice, is scheduled for September 17. According to many experts, success in it will be determined by the “political weight” of the winning company. However, it is not so easy to measure this weight: in both alliances both state corporations and influential businessmen close to the current government are represented. One of them, Mr. Usmanov, in particular, met with Russian President Dmitry Medvedev yesterday and, in the part of the conversation open to the press, discussed with him Russian and foreign investment projects of Metalloinvest.

The head of the Ministry of Natural Resources, Yuri Trutnev, promises that the winner will be determined objectively. “This is an opinion from a series of habitual suspicions. I can tell you such a simple thing. You can believe it or not, but all of Rosnedra’s guidelines sound extremely simple: maximum objectivity when making decisions,” he noted yesterday during the annual Reuters investment summit. Mr. Trutnev also explained why the authorities decided to choose the winner in a competition with additional investment conditions, and not in a regular auction, the outcome of which is decided depending on the price offered: “We understand that an investment competition is objectively more difficult to conduct than an auction. In this case, we deliberately went for this option for exactly one reason - because we consulted many times and we are confident that in this situation we do not just want to give away the license, but on the basis of this license we want to resolve a number of issues, including construction of the plant and the city."

According to the minister, depending on the results of the Udokan competition, the Ministry of Natural Resources will decide the fate of the remaining deposits, including one of the world's largest gold deposits, Sukhoi Log, in the Irkutsk region. “We will now hold the first competition, evaluate its results and think whether we are right or wrong. And it is obvious that when deciding the fate of Sukhoi Log, we will build on the results of this competition,” the minister said.

The Udokan copper deposit was discovered in 1949. It is located in the Kalarsky district of the Trans-Baikal Territory, 30 km from the Chara railway station, in a seismically dangerous permafrost zone. As of January 1, 2008, according to Rosnedra, balance reserves in category B+C1 amount to 14.4 million tons of copper (copper content - 1.56%), 7.3 thousand tons of silver and 1.9 tons of gold . A mandatory condition of the competition is the creation of a complex of enterprises for deep processing of copper with a capacity of 187 thousand tons per year. The volume of investment in the project will be about $1.6 billion. However, experts believe that the field will cost much more than these figures - at least $2.5 billion in the next ten years.

INSERT

RUSAL and Atomstroyexport have identified three priority sites for the construction of an energy and metallurgical complex in the Far East, said RUSAL Vice President Vadim Geraskin. According to him, the choice from these sites will be made in 2009, the final decision will depend, among other things, on cooperation with foreign partners, such as North and South Korea and China. He noted that it will be necessary to determine a scheme for the distribution of energy capacity to these countries. In the spring of 2008, Atomstroyexport and RUSAL created a project company for the construction of an energy and metallurgical complex in the Far East, which could cost $10 billion. The project involves the construction of a nuclear power plant with a capacity of about 4 thousand MW and an aluminum smelter, which will be the main consumer of electricity from this nuclear power plant. The plant's capacity can exceed 600 thousand tons of metal per year. Alumina for the RUSAL aluminum smelter will be delivered by sea. It will export products to China, Japan and other Asian countries, as well as to the west coast of the United States. The possibility of supplying electricity from the Far Eastern nuclear power plant to South Korea and China is also being considered. RIA Novosti

Irina TSYRULEVA