Russia brings Chinese funding into uranium mining

13 March 2018

Russia has opened its uranium mining industry to foreign investment with an agreement signed yesterday between the Russia-China Investment Fund for Regional Development (RCIF), ARMZ Uranium Holding, and Priargunsky Industrial Mining and Chemical Union (PIMCU). ARMZ and PIMCU are subsidiaries of Russian state nuclear corporation Rosatom.

Zhdanova launches Mine No6 - 460 (Rosatom)
Zhdanova launching the start of construction at Mine No. 6 (Image: Rosatom)

The three parties to the agreement will work on a uranium mining project, valued at RUB18.5 billion (USD325 million), in Priargunsky District, which is in the Zabaikalsky Region of Siberia.

Mine No. 6 has reported total reserves of 38,000 tonnes of uranium, which is 35% of PIMCU's reserves. The project foresees an annual capacity of 850,000 tonnes of uranium ore. Russia plans to bring the mine into operation in 2023.

"Both sides consider the project as the first step in widening cooperation," Russian presidential adviser Sergey Glazyev said, according to Sputnik. "I think that the enterprise is a breakthrough for creating mechanisms for joint investments in general."

PIMCU will own 51% of the new venture, while ARMZ will own the remaining 49%. Most of the project will be financed by China National Nuclear Corporation, which Russia media say is planning to invest RUB16.1 billion, while the Fund will invest RUB2.5 billion.

PIMCU, of which ARMZ owns 85%, has six underground mines in the Zabaikalsky Region - most of them operating - to supply low-grade ore to a central mill near Krasnokamensk, which is the second biggest city in the Zabaikalsky Territory.

Development of Mine No. 6 started in 2009 for stage 1 production from 2015 to reach full capacity in 2019, but this was put on hold in 2013. In March 2015, ARMZ said it hoped to find co-investors in the project. The following month, Rosatom's Investment Committee decided to finance the development to about $500 million over 2016 to 2022. In August 2016, ARMZ said funding of RUB27 billion was expected, to enable 2022 commissioning. PIMCU is focused on development of Mine No. 6, the production cost of which is USD90/kgU, to reach 1800 tU/yr.

Construction launched

Rosatom announced today that construction work had started at Mine No.6, which was marked at a ceremony attended by company and government officials.

Natalya Zhdanova, governor of the Zabaikalsky Territory, said Krasnokamensk and PIMCU are "entering a new era of development".

She said: "For the city to live and prosper every year, the miners of Krasnokamensk every hour of every day make an enormous contribution to the development of the Russian nuclear industry. Today we are witnessing an historic event - the launch of the project for which we have fought steadily and whose construction is supported by Russian President Vladimir Putin."

She added that the history of the mine started many years ago, but the time of Perestroika meant such new projects could not be undertaken.

The total area of the construction site is 3510 square metres and work is being performed by Atomspetsstroy LLC, Rosatom said. The main step-down substation of the mine, which will provide electricity to the site, is to be completed before the end of this year, it added. PIMCU will then build surface mine buildings, perform mining and capital works and the technical refitting of the hydrometallurgical plant.

The first stage of the mine will be put into operation in 2023, it said. At the third stage, in 2024-2025, the mining and capital works will have been completed and the facility will then reach its design capacity.

ARMZ said last month that the mineable reserves of the Argunskoye and Zherlovskoye Deposits of the Streltsovskoye ore field are about 40,000 tonnes of uranium, that the average content of the strategic metal therein is higher than in other existing mines, which "guarantees a competitive production cost".

First project

Establishment of the RCIF was announced during the visit of Chinese President Xi Jinping to Moscow in July last year.

The Mine No. 6 agreement - the RCIF's first project - was signed in Moscow yesterday by the ARMZ Director General Vladimir Verkhovtsev, RCIF Chairman Wang Feng and PIMCU Deputy General Director for economics and finance Denis Mikhailov.

At the signing ceremony, Wang Feng said: "It is very important that the fund's first project is connected with nuclear energy. You could say both countries made the political decision that the first project would be Mine No. 6." He added: "We will do everything necessary to ensure that this project is successfully completed."

Nikolay Spassky, Rosatom's deputy director general for international activities, said Russia's cooperation with China in the peaceful use of nuclear energy is unique, since it has no similarly extensive arrangement with any other country.

"We are building nuclear power plants together, we are cooperating on scientific breakthroughs, we are working on the nuclear fuel cycle," he said, adding that a new chapter was now opening in the history of their cooperation.

Researched and written
by World Nuclear News