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Ukraine backs Metalloinvest, Smart Group's KGOKOR investment bid

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KIEV, June 22 (RIA Novosti) - A Ukrainian government commission has approved an investment proposal by Russian holding Metalloinvest and Ukraine's Smart Group to complete construction of an iron-ore enrichment plant, the country's state property fund said Thursday.

The companies proposed setting up a joint venture to finish off the Soviet-era Kryvyi Rih Oxidized Ore Enrichment Works (KGOKOR), with the Ukrainian side holding over 50% of the stock to control implementation of the project.

The first stage of the project requires $90.88 million of investment to put into operation a pellet plant using raw materials brought in from outside, in addition to transport infrastructure funding. The second stage suggests reinvestment of earnings into the construction of a crushing and preparation plant, and re-orienting the pellet plant toward production using its own raw materials.

Total investment needed for the project is estimated at some $804 million.

Construction of KGOKOR was begun by the Soviet Union in 1983. After the collapse of the U.S.S.R., Ukraine received a 56.4% stake, Romania 28% and Slovakia 15.6%.

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