Baikal Mining Company to raise $1.25 billion for major untapped copper deposit

A Russian mining company with one of the largest copper deposits in the country will make significant steps to entering production with more than $1 billion in financing.

Baikal Mining Company, operators of Russia’s biggest untapped copper deposit Udokan, has announced in a statement that it will look to raise $1.25 billion in project financing as it fast tracks the development of the project.

With total reserves of 26.7 million tonnes of copper, Udokan is one of the biggest untapped deposits in the world. However, it remained virgin since its discovery in 1949 due to lack of technology for its unique and difficult ore.

The Baikal Mining Company needs $1.35 billion to build a plant able to mine 12 million tonnes of ore a year and produce 130,000 tonnes of copper from it.

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The company plans to invest $100 million in the project and raise the $1.25-billion project financing for the rest of the sum, Kazikaev said. With annual capacity of 12 million tonnes of ore, the project will have an internal rate of return of at least 21 percent.

Udokan, which can potentially be expanded to 48 million tonnes in future, may speed up expansion subject to favourable market conditions for copper.

“Copper is one of the most promising metals,” Kazikaev said. “That is why I think that the timeline of the project’s capacity reaching 24, 36 or 48 (million tonnes of ore) may be tightened.”

sub-commercial production at the deposit at the end of 2021 which will reach its full production capacity in 2022.