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opper concentrate production started at
Russia's largest undeveloped copper deposit on Monday following a ceremony
overseen by President Vladimir Putin via video link.
The long-awaited Udokan project in Russia's
far east is coming on stream at a challenging time. The United States imposed
sanctions on its operator - Udokan Copper - in April as part of a wave of
restrictions placed on Russia due to its activities in Ukraine.
Copper prices also fell 14% in 2022 and are
flat so far this year due to weaker than expected demand.
The project, however, relies on its
proximity to top metals consumer China and on demand there, as well as future
demand from the global green energy transition.
"Go ahead," Putin said during the
ceremony, broadcast by state TV.
The processing plant at Udokan will produce
sulphide copper concentrate with 40% to 45% metal content, the company said. It
plans commercial sales this year, but has not disclosed potential buyers yet.
Once the first stage of the metallurgical
plant is launched in 2024, Udokan will be able to handle up to 15-million
metric tons of ore per year, with annual production of up to 150 000 tons of
copper in the form of copper cathode and concentrate.
The deposit is the largest in Russia with
an estimated 26.7-million tons of copper resources. It has been untapped since
its discovery in 1949 because the technology didn't exist to exploit its unique
and difficult-to-extract ore.
In the 1970s, a student at the Moscow
Mining Institute researched the idea of a "clean" nuclear blast to
extract Udokan's ore, but that remained on paper.
Russian billionaire Alisher Usmanov bought
the right to develop Udokan for $500-million from the government just before
the 2008 financial crisis. It took 10 years to solve the technical challenges
of the project, create a new geological model and start construction.
By 2028, Udokan plans to build the second
stage of its mining and metallurgical complex, increasing annual capacity to
24-million to 28 million tons of ore and up to 450 000 tons of copper.