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Rostekhnologia Wants into Mining Co.
Among the companies that will form the authorized capital of Rostekhnologia, the state corporation being formed around Rosoboronexport, under a government act being considered is the 49-percent Russian share in the Russian-Mongolian Erdenet metals company, the fifth-largest copper mine in Asia, which brings in at least $100 million per year in dividends. Head of the corporation Sergey Chemezov submitted a draft presidential order on state property contributions to the corporation at the end of last December, in which that property was listed.
Erdenet was founded in 1972 in Mongolia. Its raw materials base consists of the Erdenet zone, 22 km. long and 5 km. wide, which contains several copper and porphyry deposits. The northwestern section of the Erdenet-Evoo deposit is now being mined. It has reserves of 1.3 billion tons of ore. The Mongolian government owns the remaining 51-percent share in it. The joint venture produces 25 million tons of copper ore, 550,000-570,000 toms of copper ore concentrate and up to 50,000 tons of molybdenum concentrate per year. Its receipts from the sale of those products was $1.4 billion in 2007. Its reserves are expected to last 30 years.
Previously, Russian plans for Erdenet were to increase the Russian share to controlling and transfer its management to private hands. This was ststaed by Agriculture Minister Alexey Gordeev when he headed a commission on Russian-Mongolian trade and economic cooperation last summer. Sources say Gazprombank was also interested in acquiring the asset.
A member of the Erdenet board of directors told Kommersant that the Mongolians have preemptory rights to buy Erdenet stock if it being sold and they have opposed any private trustee management of the Russian share. Since transferring it to Rostekhnologia would mean that it remains in state ownership, the Mongolians are not expected to object to that move.
Rostekhnologia spokesmen say that the corporation's interest in the mining enterprise is due to its molybdenum production. That mineral is used in titanium production. Rosoboronexport owns VSMPO-Avisma, the world's largest producer of titanium.
www.kommersant.com
All the Article in Russian as of Feb. 05, 2008
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