The Baim project shifts the deadlines - Newspaper Kommersant No. 218 (7419) dated 11/24/2022

According to Kommersant's information, Kazakhstan's Kaz Minerals may postpone the launch of the Baimsky ore project in Chukotka by one year, until 2028. At the same time, the launch of the lead floating nuclear power plant of Rosatom, which is necessary for power supply of the facility, may shift to the right by one year. The shift in the launch of the plant, according to analysts, was expected due to difficulties with financing against the backdrop of sanctions and the supply of equipment.

Kaz Minerals may delay the launch of the copper-gold Baimsky GOK in Chukotka, sources in the industry told Kommersant. One of them specified that the project could move one year to the right. Kaz Minerals wanted to start mining and processing ore at the Baimsky site in 2027. Kaz Minerals declined to comment. The office of Deputy Prime Minister Yuri Trutnev, who oversees the Far East, told Kommersant that they had no information about the postponement of the project.

The Kaz Minerals group is controlled by Vladimir Kim and Oleg Novachuk through Nova Resources. The volume of private investments in the Baimsky project is estimated at $8 billion, the plant's capacity is 70 million tons per year. The deposit's resources are estimated by JORC at 9.9 million tons of copper and 16.6 million ounces of gold.

This summer, the annual report of Kaz Minerals reported that due to sanctions, the company may face problems in fulfilling its obligations under VTB loans, which were included in the American SDN list. The report also noted that sanctions could negatively affect the ability to obtain funding and equipment for the development of the Baimskaya area. However, Kaz Minerals then told Kommersant that the impossibility of servicing the debt to VTB does not affect the company's activities, since Kaz Minerals generates significant cash flows from its operations in Kazakhstan and Kyrgyzstan, selling metals mainly to China (see Kommersant ” dated August 3).

At the same time, according to Kommersant's information, the launch of the energy infrastructure for the project may also move. Rosatom is building four nuclear floating power units (FPU) based on RITM-200 reactors with a capacity of 106 MW each to supply power to the Baimsky GOK. The head unit was planned to be launched in 2027 in sync with the plant, but now its launch is likely to be shifted by a year as well. One of Kommersant's interlocutors claims that the construction of FPU cases and the production of equipment for them are proceeding as planned, but there are questions about electronics. Atomenergomash (the machine-building division of Rosatom) does not comment on the situation.

It is assumed that Kaz Minerals will buy electricity from PEBs under a free long-term contract (FLD). The price of electricity from PEBs for the GOK will be 6.45 rubles. per 1 kWh (in 2020 prices). The price is indexed to inflation every year. So far, the parties have not publicly announced the signing of the DDD.

In 2021, it was reported that the cost of building four FPUs would be 190.2 billion rubles. VAT included. The contract for the construction of turbines was won by Kirov-energomash (part of the Kirov Plant), the cost of the contract is 16.5 billion rubles. The construction of the first two buildings is carried out by a Chinese shipyard, the contract value is $226 million. The third and fourth buildings are planned to be built in Russia.

The project is influenced by a complex of factors, the key of which is the issue of attracting funding, says Mikhail Burmistrov, head of the Infoline-Analytics company. Now, 2029 looks like a more realistic launch date for the plant, given the scale of the project, possible problems with the supply of equipment and the transportation of goods along the Northern Sea Route. There are also risks associated with the construction of power plants, the analyst warns: the construction of FPUs was initially too short.

The postponement of the launch is likely due to the availability of imported mining equipment, says Sergey Grishunin from the NRA. On the other hand, the preparation of energy infrastructure, in particular, nuclear power plants, also seems to be moving to the right. At the same time, the current crisis will significantly reduce demand for copper raw materials, while investor demand for gold is still low, which may lead to the closure of some copper and gold mining facilities in 2023-2024, Sergei Grishunin believes. In his opinion, this may provide increased demand for Baimsky GOK products in 2027-2030 due to the lack of new investments in the world in other large copper mining projects.

Polina Smertina

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