Intergeo, a new ore mining subsidiary of Russia's Onexim Group private equity fund owned by billionaire Mikhail Prokhorov, has purchased the Kingash Ore Mining Combine from the country's largest nickel producer Norilsk Nickel, Kommersant business daily reported on Thursday.
The terms of the deal have not been disclosed.
Intergeo, which owns 12 licenses received from the division of business between Prokhorov and his former business partner Vladimir Potanin, tried to buy Kingash from Norilsk Nickel back in 2008. The company planned to swap the factory for a number of licenses for deposits geographically located in the zone of Norilsk Nickel's interest, but the parties failed to agree, the paper said.
Kingash, which is located in the south of the Krasnoyarsk region, consists of two deposits of cobalt-copper-nickel ore, Kingashskoe and Verhnekingashskoe, with total reserves amounting to 2.2 million tons of nickel according to categories B +C1+C2, one million tons of copper, 85,000 tons of cobalt, 8.6 million ounces of platinum group metals, 1.2 million ounces of gold, and 12.7 million ounces of silver, the paper said.
Kommersant quoted one of the sources familiar with the matter as saying that Intergeo planned to unify the Kingash factory with the Iysko-Tagulskaya area in Eastern Siberia which contains 9 million tons of nickel, 3.5 tons tonnes of copper and 750 tons of platinum group metals.
The united enterprise will match world-class fields, the source told the paper, adding Intergeo planned to build an ore mining and dressing plant and possibly a metallurgical factory. Total investment in the project is estimated at $2-3 billion, but the sum is preliminary, the paper said.
Kommersant also quoted a source close to Norilsk Nickel as saying Kingash completely lacked infrastructure and had a relatively low metal content in ore, but analysts consider the project viable.
Uralsib analyst Dmitry Smolin told Kommersant that only Norilsk Nickel had funds to finance such a project and therefore, after consolidation and further exploration of the fields Intergeo may sell it back, he said.
MOSCOW, November 18 (RIA Novosti)
