Russia’s Norilsk Nickel launched a greenfield copper, iron and gold mine in the country’s remote Far East on Tuesday, the company said.
The Bystrinsky project, some 400 km (250 miles) by rail from the Chinese border in the Siberian region of Chita, plans to export its production to China, the world’s top iron ore consumer.
Shanghai copper futures have risen around 18 percent so far this year on strong demand in China, also the leading consumer and producer of the metal. .
Russia has sought closer ties to China after Moscow’s relations with the West were soured by its annexation of Crimea from Ukraine in 2014 and its support of the conflict in eastern Ukraine.
Bystrinsky is scheduled to produce 28,000 to 30,000 tonnes of copper in concentrate along with around 140,000 ounces of gold and up to 1 million tonnes of magnetite concentrate in 2018, reaching half of its capacity, Sergey Dyachenko, Nornickel’s chief operating officer, told reporters.
He said Nornickel, whose key assets are located on the northern Russian peninsulas of Taymyr and Kola, would reach its full capacity of 10 million tonnes of ore in Bystrinsky by 2020.
Nornickel, the world’s second-largest nickel and top palladium producer, holds 50 percent of Bystrinsky, while the Chinese-owned Highland Fund has a 13.33 percent stake.
Nornickel co-owner Vladimir Potanin along with his partner Grigory Berezkin hold the remaining 36.7 percent via CIS Natural Resources fund.
Nornickel’s investments in the project stood at around 90 billion roubles ($1.55 billion) over 18 months.
“There is big interest from Chinese consumers both in iron ore magnetite concentrate and copper (concentrate). We may say that China will be the major consumer of this output,” Dyachenko said.
He said he did not expect copper prices to rise significantly as the global market was balanced. In August, Nornickel hired a trading team in China to market concentrates from the Bystrinsky mine.
The company says the mine is one of the 10 largest developed copper deposits in the world.