On Monday, Russia's largest undeveloped copper mine began producing copper concentrate. Earlier, Russian President Vladimir Putin presided over a ceremony via video link.
The long-awaited Udokan project in Russia's Far East comes on stream at a challenging time. In April, the United States imposed sanctions on its operator, Udokan Copper LLC, as part of a series of restrictions imposed on Russia over its activities in Ukraine.
Copper prices are also down 14 percent in 2022 and flat so far this year due to weaker-than-expected demand.
However, the project relies on its proximity to China, the largest consumer of metals, and its demand, as well as the future needs of the global green energy transition.
"Carry on," Putin said in a ceremony broadcast live on state television.
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The processing plant at Udokan will produce copper sulfide concentrate with a metal content of 40-45%, the company said. The company plans a commercial sale this year, but has not yet revealed potential buyers.
Once the first phase of the metallurgical plant starts up in 2024, Udokan will be able to process up to 15 million tons of ore per year and produce up to 150,000 tons of copper cathode and copper concentrate per year.
The mine is the largest copper mine in Russia with an estimated copper resource of 26.7 million tons. Since its discovery in 1949, it has remained untapped because the technology to develop its unique and hard-to-extract ore does not exist.
In the 1970s, a student at the Moscow Mining Institute studied the idea of extracting Udokan ore with a "clean" nuclear explosion, but the idea remained on paper.
Just before the 2008 financial crisis, Russian billionaire Alisher Usmanov bought the development rights to Udokan from the government for $500 million. It took 10 years to solve engineering problems, create new geological models and start construction.
By 2028, Udokan plans to build the second phase of its mining and metallurgical complex, increasing its annual capacity to 24 million to 28 million tonnes of ore and up to 450,000 tonnes of copper.
