Udokan is the largest undeveloped copper deposits in Russia and one of the largest in the world, promising 130,000 tonnes of copper per year.
The Udokan copper project in eastern Siberia has now broken ground, with owner Baikal Mining Company announcing on Tuesday (September 4) the commencement of works on the mining and metallurgical plant at the site by placing a memorial stone.
From humble beginnings, today Udokan promises a lot for the Zabaikalye Krai region in Siberia with 2,000 jobs estimated to be created.
The plant, which is part of stage one construction, will have a capacity of 12 million tonnes per annum of ore with the potential for an expansion to 48 million tonnes.
Stage one will come online in 2022, and according to Baikal Mining, will average an output of 130,000 tonnes of copper metal in the first 10 years of operations.
Udokan is the largest undeveloped copper deposit in Russia, and one of the largest in the world, with its total reserves clocking in at 26.7 million tonnes of copper.
Looking ahead, Baikal Mining will begin work on site preparation and start staging preparation for the infrastructure required for the mammoth project, which is located in an isolated part of Siberia.
“In the coming months the company planned to set up the construction division and road building division right at site,” said the release.
Baikal Mining noted the speed at which Udokan was being developed, with the process beginning in 2008. Company chairman Valery Kazikaev noted skepticism that the project would proceed, and praised the government for its assistance in the release.
“One shall always remember that it is impossible to resolve the issues of such scale without proactive cooperation with the government of the region,” said Kazikaev.
“Project execution crucially changes the economic, infrastructure and social landscape of the territory. Synchronization of Udokan mining and metallurgical plant development plan with general territory development plans is essential for the efficiency of the project. We as well as the government of the region are fully aware of it,” he added.
Baikal Mining is owned by Russia’s 10th richest businessman, Alisher Usmanov, through USM Holdings, which Usmanov is the major shareholder of.
USM (and Usmanov’s) portfolio also includes Metalloinvest, a major iron ore producer, and Nautilus Minerals (TSX:NUS), which is a beneficiary of an ongoing loan facility from USM of up to US$34 million for operational costs that is seeing Usmanov slowly increase his stake in the Canadian undersea explorer.
Azarga released a positive PEA for Unkur only last week, in which it noted proximity to Udokan in Zabaikalye Krai will allow its project to benefit from improving infrastructure connections.
According to Baikal, existing infrastructure in the region is being upgraded to satisfy Udokan’s requirements, including the construction of additional power lines and increased capacity at the nearest railway station connecting to the the Baikal-Amur mainline that will handle cargo from the mine.
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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Azarga Metals is a client of the Investing News Network. This article is not paid-for content.