MOSCOW, January 17 (RIA Novosti) – IRC, the iron ore division of the London-listed gold miner Petropavlovsk Plc, has signed a tentative deal to raise $238 million from Chinese firms to finance its production growth in the Far East, the company said on Thursday.

“Petropavlovsk Plc is pleased to announce a potential $238 million investment in IRC Limited by General Nice Development Limited and Minmetals Cheerglory Limited to fund production growth,” the statement said.

The transaction proceeds will be used towards the development of the Kimkanskoye and Sutarskoye (K&S) iron ore deposit and to advance with the development of the Garinskoye project in the Amur region.

The Chinese firms will make the investment through a subscription for new IRC shares in a two-stage transaction.

The K&S deposit is located in the Jewish Autonomous Area some 40 km (25 miles) from the Chinese border. It is connected to the Trans-Siberian railway and the federal highway, with both of them linked to routes into China. The site is also connected to local electricity and water supplies, which it uses in addition to its own facilities.

The Garinskoye iron ore project field is expected to be commissioned in 2015.