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China Wants to Invest in Russia’s Giant Udokan Copper Deposit

Created: 23.06.2006 16:08 MSK (GMT +3), Updated: 16:08 MSK

MosNews

Chalco, China’s largest aluminium producer, said it wants to invest in copper mines in Russia and Mongolia in order to meet the surging demand for this market. In Russia Chalko is seeking to bid for development of the giant Udokan copper deposit, which is located in Chita region on the Russian border with China.

Beijing-based Chalco joins BHP Billiton and Rio Tinto, the world’s two largest mining companies, which already established joint ventures in Russia, seeking to tap into the country’s mineral wealth.

The Chinese company has signed an initial agreement with Russia’s Ural Mining and Metallurgical Co. and is seeking to take a 50 percent stake in a venture with the Russian partner to develop the Udokan deposits, the company’s official said. Udokan holds 20 million tons of ore with 1.53 percent copper. Chalco may not be able to secure the 50 percent stake, however, as Udokan is classified as one of Russia’s strategic deposits and it may only be developed by a Russian company or a joint venture, in which the Russian partner holds 51 percent. Chalco will also have to compete with Rio Tinto and BHP Billiton, both of whom signed cooperation agreements with Russia’s largest mining company Norilsk Nickel for exploration and production of mineral resources in different parts of the country.

Russia plans to auction its two biggest mineral mines this year. The government said only Russian companies will be able to bid for Sukhoi Log gold deposit in Siberia and only companies at least 51percent owned by Russian concerns will be able to bid for Udokan. Sukhoi Log is Russia’s biggest untapped gold field with at least 1,000 tons of reserves.

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