OREANDA-NEWS. September 14, 2011. In the course of the 7th Baikal Economic Forum (the city of Irkutsk, September 12-14, 2011) the State Corporation ‘ Bank for Development and Foreign Economic Affairs (Vnesheconombank)’, the Baikal Mining Company and VEB Engineering  entered into a Memorandum of Intentions.

On behalf of Vnesheconombank the Memorandum was signed by Management Board Member – Vnesheconombank Deputy Chairman Anatoly Ballo, on behalf of the Baikal Mining Company – by its Director General Andrei Varichev and on behalf of VEB Engineering - by its Director General Dmitry Sheibe.

The Memorandum provides for establishing partnership and promoting long-term cooperation between the parties in implementing the Udokan Copper Deposit Project. The deposit is located in the Zabaikalye Territory.

Under the Memorandum the Baikal Mining Company is to engage VEB Engineering in conducting required technical expert examination and structuring of the Udokan Copper Deposit Project and/or related projects in line with Vnesheconombank’s financial and investment policies requirements. The parties also expressed their intention to cooperate with the Zabaikalye Territory in preparing and implementing projects on developing transport and social infrastructure on PPP conditions.

In order to swiftly carry out measures specified by the Memorandum the parties is to establish a working group.

VEB-Engineering LLC is a specialized engineering company established in 2010 for engineering support for and monitoring of large-scale investment projects funded by Vnesheconombank. The company is responsible for providing engineering support for projects including technical and budget auditing, design and construction audit, engineering support for design and construction, project engineering, financial control over project budgets, preparations for project feasibility studies and etc.

The Baikal Mining Company was established specially to develop the Udokan copper deposit. It was registered on November 14, 2008. The Mikhailovsky Mining and Enrichment Integrated Works (it is incorporated in METALLOINVEST holding) is a founder and owns a 100% stake in the charter capital of the Baikal Mining Company (LLC). The Baikal Mining Company owns a license for using a subsurface plot to produce copper and associated components at the Udokan deposit in the Zabaikalye Territory.

The Udokan Copper Deposit Project provides for developing the Udokan deposit copper ores in the Zabaikalye Territory, constructing a hydrometallurgical integrated works as well as infrastructure facilities including a coal CHP with a capacity of 400 MW, a housing settlement, branch railway lines. The total value of the project is 5 831.2 million U.S. dollars. The Udokan copper deposit is among the five largest copper deposits in the world (in B+C1 category, confirmed ore reserves amount to 924.5 million tons, copper – 14.4 million tons).