Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr
Issue link: https://emj.epubxp.com/i/665536
RUSSIAN PLATINUM 46 E&MJ; • APRIL 2016 www.e-mj.com Russian Platinum to Grow Production While many are skeptical, a Russian mining company extracting PGMs from placer deposits says it could be a world leader with the proper investment By Vladislav Vorotnikov Russian Platinum (RP) aims to invest $4.4 billion to launch mining operations at two deposits in Krasnoyarsk Krai in the middle of Siberia, bringing Russia's over- all platinum production capacity to 70 metric tons (mt) by 2029. The implemen- tation of the program became possible after the state-owned VnesEconomBank (VEB) approved a large-scale loan at the end of 2015. At the moment, RP mines platinum at the Kondyor placer deposit in Khabarovsk Krai, where production varies with de- pleting reserves from 2.4 to 3.6 mt/y. Here, the company is also testing various technologies for any possible increase in effi ciency for its mining operations and implementation at other projects. "Within the [fi rst] six months [of 2016], VEB will take decision on the allocation of funds for RP for the con- struction of the fi rst phase of the project in Krasnoyarsk Krai with the total invest- ment amount of $1 billion," said Vladimir Dmitriev, head of VEB. "Depending on the level of interest RP would offer to the bank, VEB may also attract some Chinese partners to participate in the project." According to RP's co-owner Musa Ba- zhaev, the company plans to start mining platinum at the Chernogorsky deposit in 2018 and the southern part of the No- rilsk-1 deposit in 2019. In 2020, the company plans to reach commercial production on both projects, with capac- ity reaching 5 mt/y. The projects should reach full capacity of 70 mt/y of platinum in 2029. By that time, the company ex- pects to be one of the top three platinum producers in the world. Musa Bazhaev also explained that, of the $4.4 billion investment, the company will need $1.2-$1.3 billion for the de- velopment of the Chernogorsky deposit, while the rest ($3.1-$3.2 billion) will be invested in Norilsk-1. The company said the Chernogorsky deposit has 143 mil- lion mt with an average grade of 0.22% nickel, 0.29% copper and about 3.9 g/mt platinum group metals (PGMs) and gold. The PGMs are located at a depth of 20 m in the western part and 245 m in the eastern part of the deposit. RP will build a mill and smelter where the concentrate will be processed to produce a copper-nickel matte. The company also plans to build a plant for hydrometallurgical processing of cop- per-nickel matte. Initially, it had expect- ed to produce fi rst metal from the deposit by 2015, but the company postponed the plan due to a lack of funds. The reserves at Norilsk-1 are believed to contain 1,500 mt of PGMs and RP plans to develop both projects within a joint industrial cluster. Based on 2014 estimates, production costs were $600/ mt of platinum, which is signifi cantly lower than mines in South Africa, which are the leading platinum producers today. RP has not re-evaluated production costs, but they believe costs will be lower due to the devaluation of the Russian ruble. "We will process ore from the Cher- nogorsky deposit fi rst, and then from No- rilsk-1," said Magomed Galaev, a member of RP's board of directors. "Our task is to produce at the fi rst phase 6 million mt/y of ore, and eventually bring that level to 12 million mt/y. The resources of the two deposits will allow RP to reach this goal. Total reserves of these assets taking into account off-balance sheet are more than 600 million mt of ore and we are target- ing to process both on-balance sheet and out-of-balance sheet reserves. This would provide company with raw materials for 50 years." "We will be able to produce annually at least 500,000 oz of platinum," Galaev said. "At these volumes, the company will Musa Bazhaev, co-owner of RP. Working a large placer deposit, Russian Platinum has invested in a fl eet modernization program.