Metals of Eastern Siberia Corporation Ltd. has attracted Chinese investors to Buryatia
Metals of Eastern Siberia Corporation Ltd. has
attracted Chinese investors to Buryatia by concluding Agreement on
principles of financial cooperation between China Development Bank
Corporation (CDB), China Nonferrous Metal Industry’s Foreign
Engineering and Construction Co., Ltd. (NFC) and Metals of Eastern
Siberia Corporation Ltd. of Russia.
The signing ceremony took place in Moscow on 22
March 2013 in the framework of the first visit of new Chinese
leader Xi Jinping to Russia, and in the presence of Dmitry
Rogozin, Russian Deputy Prime Minister and Wang Yang, Vice-Premier
of the PRC State Council. On behalf of the Russian party the
Agreement was signed by Ilya Okhtyrskiy, the MBC Corporation
General Director, on behalf of the Chinese party, it was signed by
Wang Hongqian, the NFC General Manager, and Zheng Zhijie, the CDB
The Agreement provides for the establishment of
a joint venture between MBC Corporation and NFC to develop the
polymetallic “Ozernoe” deposit in the Republic of Buryatia and in
the construction of the Ozerny Mining & Processing Plant. Under
its terms the NFC will acquire 50% share in the “Ozernoe” Project.
The Parties have agreed that the total amount of investments in the
construction of the Ozerny Mining & Processing Plant shall be
up to 1,5 USD billion.
The Agreement also provides for loan financing
of Ozerny GOK construction by CDB.
The MBC Corporation will conclude an integrated EPCM (Engineering,
Procurement and Construction Management) contract, as well as an
off-take contract for Ozerny GOK output.
The signing of the Agreement was preceded by two
years of negotiations. On the part of NFC there was a lot of work
to review the project, legal and financial Due Diligence have been
successfully completed with the assistance of Ernst & Young and
a number of consulting companies of China. On April 28 2012 MBC and
NFC signed a Framework agreement. The Chinese company has also
fulfilled technological testing of ore samples from “Ozernoe”
deposit, its positive results have been obtained.
After signing of the Agreement it is planned to
visit the site of Ozerny GOK in the republic of Buryatia, meet with
the leaders of the republic, representatives of National
Khural and Viktor Tolokonsky, the Presidential
Plenipotentiary Envoy to the Siberian Federal District.