Tomsk to Get Metals Investment

Investment company Metropol may spend as much as $20 billion to build a mining and steel-production complex in Siberia's Tomsk region, Kommersant reported Tuesday.

Metropol bought 51 percent of TomGDK-ruda, owner of prospecting and mining rights for the Polynyansky district of the Bakcharsky iron ore deposit, Kommersant said.

Metropol plans to build a plant with a capacity of about 20 million tons of ore by 2015, and sell concentrate and rolled products to eastern Russia, China, Korea and Japan, the newspaper said, citing Metropol president Mikhail Slipenchuk.

Metropol's plan to build the country's largest metal production complex from scratch is unrealistic, Troika Dialog analyst Sergei Donskoi said, Kommersant reported. Metropol is likely to seek a profit by selling the project before completing it, Donskoi said.

Slipenchuk said that the project would have to extract 20 million to 30 million tons of iron ore annually before it could become profitable.

"This requires serious capital expenditure," Slipenchuk said, Kommersant reported. "Between $2 billion and $3 billion into mining and enrichment, and between $15 billion and $20 billion into the production of pipes, steel, fittings and rails."

The Tomsk regional government also plans to apply to the federal investment fund to finance the construction of infrastructure, Tomsk Governor Viktor Kress said.

Source: The Moscow Times, Wednesday, July 25 — 2007