OREANDA-NEWS. MMC Norilsk Nickel and Federal Railroad Transport Agency (Roszheldor) entered into the investment agreement on construction of Naryn-Lugokan railroad in Chita region. The parties signed the agreement at the 11th International Economic Forum in Saint Petersburg.

The new 375 kilometers long railroad will provide access to Trans-Siberian trunk from major mineral deposits located in the Baikal region including: Bystrinskoye, Kultuminskoye, Lugokanskoye (copper-sulfide deposits), Solonechenskoye (antimony-gold deposit) and Bugdainskoye (gold-molybdenum-porphyrite deposit).

The railroad construction project is administered on the terms of partnership between the state and private investor. Pursuant to Decree of the Russian Government No. 1708 dated November 30, 2006, in 2007-2011 the Russian Investment Fund is to commit 69% of the total cost of construction with the remaining portion of costs to be covered at the expense of MMC Norilsk Nickel. The total amount of estimated railroad construction cost is RUB 51.5 billion (estimated as at January 1, 2006).

General Director of MMC Norilsk Nickel Denis Morozov believes that the joint project Construction of Transport Infrastructure for Development of Mineral Resources in the Southeast of Chita Region to be implemented in cooperation with the Investment Fund of the Russian Federation will provide a spectacular example of the way the state and private businesses benefit from cooperation.

The new railroad track will largely contribute to the development of the entire region through additional tax payments and new workplaces, whereas Norilsk Nickel will be able to advance the development of a group of copper, gold, silver and iron projects licensed to our Company, Mr. Morozov said.

The mineral deposits of the Chita project will provide basis for Norilsk Nickel's plans that involve commissioning of mining and concentration capacities with total output in excess of 35 million tons of ore per year in 2012 - 2015. Lifetimes of deposits, most of which are suitable for open-pit mining, will exceed 30 years.