Forecasting rising demand in copper, Russian mining companies have invested heavily into opening mining operations in Udokan and another remote Siberian copper reserve to produce the precious metal. Production is expected to start in 2022, requiring USD $7 billion of investment. Alisher Usamnov acquired Udokan through his company USM Holdings in 2008, and is expected to increase their copper production to 400,000 tonnes by 2026.

Valery Kazikayev, chair of Udokan Copper’s board, expects that the facility’s production capacity will allow for the company to be “among the top 10 copper producers globally”. Kazikayev notes that Udokan may be the last known mine with a significant copper content, being above 1%. He also notes that some mines being developed today have a copper content of 0.3%.

Kaz Minerals has focused its development efforts on Baimskaya, another remote location in the Chukotka region, being some 3000 km away from the nearest railroad and 700 km away from the nearest port. Kaz Minerals has raised its estimated investment by 50% to USD $8.5 billion. Despite complex logistical issues, which may result in the company requiring an icebreaker to keep a sea route viable, the company is committed to seeing it open for production. The Baimskaya mine is expected to open in 2027 and produce an estimated 300,000 tonnes of copper and 500,000 ounces of gold annually for at least 10 years.

According to their natural resources ministry, Russia has the third-most copper reserves in the world, though it is only economically viable to mine the metal when the price of a tonne of copper is significantly above its long-term average, as is the case now. With the above projects, the natural resources ministry expects Russia to more than double its annual output to above 2 million tonnes by 2030, becoming the world’s fourth-largest producer.

Source: https://www.ft.com/content/d2c1cdad-f075-42a9-9372-2b54269f6316