Andrei Kozitsin
General Director of UUMC

    In the Soviet period many attempts were made to start the development of the Udokan copper deposit but all of them failed. It is a distant and almost unmanned area with very severe climatic conditions (in winter the temperature is down to minus 50^oC). Local construction is associated with enormous expenditures several times exceeding the cost of similar works in the populated areas.
Among the projects whose preparation began forty years ago, there were very wild ones. For example, is was suggested to carry out development operations with the help of nuclear explosions. Fortunately, this dangerous idea failed to find enough support. The designers were not limited in funds. The planning authorities were tempted to set up a big industrial project. A typical variant of that time advocated the construction of a mining&metallurgical complex for the annual processing of 35 million tons of ore and production of 560,000 tons of refined copper. This would have required 15,000 workers for operations and the building of an actual town for them.
The disadvantages of such projects have become evident nowadays. An opportunity to employ the entire economic power of the state in order to solve a particular problem disappeared. An investor should rest on his own power, get down only to works he is able to fulfil. That is why technical projects are based on the criteria of "necessity" and "sufficiency" both in evaluating the mineral mining tonnage and estimating the investments.
A new stage in the attempts to develop Udokan has begun. The Ural Mining and Metallurgical Company, as an entity more interested than others in the expansion of the copper raw materials base in the territory of Russia, proposed its own program. This project is supported by three other participants: the Ministry of Communications of Russia, which takes this as an opportunity to attract freight flow to the Baikal-Amur railroad, the administration of the Chita Region where this deposit is situated, and the Moscow administration aiming to secure its presence in the Russian province.
Sergei Oposhnyansky and Yevgeny Khokhlov, correspondents of Eurasian Metals, decided to clarify what the situation with this promising project is just now. Andrei Kozitsyn, General Director of Ural Mining and Metallurgical Company (UMMC), answered their questions.
EM: how much will it cost to harness Udokan, and for what term are the investments planned to be made?
– Our company offers potential investors a complex program comprising a number of interesting projects, and the largest of them is the development of the Udokan copper deposit. We count on attracting investments of US$300 million over five to seven years.
EM: what, in the opinion of UMMC‘s specialists, should be the approache to the mining of the Udokan deposit?
– The feasibility report (FR) elaborated by us specifies individual stages of developing Udokan. Around 2 – 2.5 years will be spent on preparation of works, set-up of a building base and construction of a low-capacity (100-150 thousand tons of ore) pilot plant. The plant will make it possible to tune a concentrating process to be further applied in the main production operations. The construction of a mining and metallurgical complex is planned to be carried out in two stages. Each stage capacity is 5 or 6 million tons of ore per year.
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EM: who from your foreign partners showed his interest to the project? ��� �� ����� ���������� ��������� UMMC ������� ������� � ����� �������?
– We cooperate with Bateman, South Africa, in the problems of developing Udokan, including final adjustment of FR and estimation of investments. This company has long practice in everything dealing with mining operations and a high reputation as an expert. The Bateman‘s representatives visited the site of future mining operations, met with designers, geologists, received all required information and are now convinced (and will try to convince us with the help of calculations) that there is a need to create at once the whole mining and metallurgical complex of 12 million tons capacity in ore or 150,000 tons in copper concentrate per year. According to their estimation, it is optimal from the viewpoint of efficiency and payback period. If we approve this concept a preparatory stage will take place all the same, and the main construction operations will last three to four years.
EM: why was this time period evaluated for the operations?
– This is a standard term, we shall try to cope with it. Much will depend on the level of engineering, on the solutions to be laid in the project. For example, we intended to apply concentrators that have never been applied at any enterprise – not of horizontal but vertical type. It means that there will be no need to build long, up to one kilometer, industrial houses. The deposit will be mined at the first stage by an open-cast method, by benches, pits.
EM: are there any other projects for the development of Udokan?
– The Ministry of Economy is examining the solutions envisaging the investments of US$1-1.5 billion and set-up of a complex with the capacity of 400,000 – 500,000 tons of copper concentrate. For this complex, a new electric power station will have to be built, along with other infrastructure units, and all this will need not just US$1.5 billion but much more. Here the point is not only the money: in this region, it is impossible to create an industrial giant of this size – there are no sufficient manpower. Even for the implementation of our project great efforts will have to be made. If the construction program of the first stage is successfully fulfilled it will guarantee a raw materials guarantee to the Ural copper smelters. In my opinion, any other opportunity to set up a reliable raw materials base for the Russian copper industry does not exist so far.
EM: with the start of the operations at the Udokan complex, large raw materials resources will be in the hands of UMMC. How do you intend to dispose of them?
– The enterprises of our company will be the consumers of Udokan copper. To sell copper concentrates when you have a complete process cycle in your own hands is at least unreasonable. UMMC will enter the market mainly with rods and other products, and, as an exclusion, with cathode copper. Let us wait and see how the market of nonferrous metals will develop. In the case of a rise of LME prices, our company will be able to build up the output tonnage and produce much more than 360,000 tons of refined copper of 2001. From the viewpoint of production, we are fully equipped for this probability.