The government allocated more than 27.5 billion rubles for the expansion of the port of Pevek

“Cargo berths, hydraulic structures will be built there, including the water area, an approach channel, a dam, as well as the necessary navigational equipment. The infrastructure will make it possible to ensure the installation of additional floating nuclear power units, which will make it possible to bring the unique Baimskoye deposit to its design capacity and ship up to 2 million tons of metals mined there at the terminal,” the government press service quoted him as saying.

In November 2022, the governor of Chukotka, Roman Kopin, reported that the cargo turnover of the port of Pevek increased by 35% in 2022 and reached 380,000 tons. The port received 60 ships, 17 more than in 2021. Navigation in Pevek has been going on since July 3 until October 25th. The port is equipped with a 500 m long berth.

From the government decree signed by Mishustin on March 1, 2023, it follows that the total investment in infrastructure will amount to 55.21 billion rubles. The remaining 27.58 billion rubles. will be directed to the project from extrabudgetary sources.

Budget funds are divided into two parts: 17.26 billion rubles. will be directed to the construction of cargo berths, the remaining 10.37 billion rubles. – for infrastructure for a modernized power unit of a floating nuclear thermal power plant (FNPP, owned by Rosatom), which will provide energy for the development of the Baimskoye field.

Baimskoye is one of the largest undeveloped copper areas in the world. The Peschanka deposit within the Baimskaya licensed area has JORC resources of 9.9 million tons of copper and 16.6 million ounces of gold. The Kazakh group KAZ Minerals acquired the project from a consortium of investors including Roman Abramovich and Alexander Abramov in 2019 for a deal worth $900 million in cash and shares.

KAZ Minerals plans to build two concentrators at the deposit with a total processing capacity of 70 million tons of ore per year and a production volume of 400,000 tons of copper equivalent. The expected year of the start of production is 2027, the total volume of private investment is 620 billion rubles. The government order does not say who will act as a private investor, but earlier it was reported that KAZ Minerals would invest about 15 billion rubles in the construction of a cargo terminal.

In June 2022, the structure of Rosatom Chukotatomenergo began construction of a marine terminal with four floating power units (FPU) to supply power to Baimsky GOK with a total capacity of 318 MW. The power units themselves will be built by the St. Petersburg Baltic Shipyard (part of the United Shipbuilding Corporation, USC).

As part of the project, the Ministry of Transport and the Ministry of Finance will send budget money to Rosatom, which has been appointed the state customer for the construction, follows from the government’s order. The developer will be FSUE Hydrographic Enterprise, which is part of Rosatom.

Vedomosti sent inquiries to the Russian government, Rosatom and KAZ Minerals.

The state part of the port infrastructure is managed by a branch of the Federal State Institution “Administration of the Sea Ports of Chukotka”, controlled by the Ministry of Transport of Russia. The port operator is the private JSC “Naval Order of the Badge of Honor” Pevek Commercial Port. According to SPARK-Interfax, in 2015 99.9% of the shares of the port belonged to Marina Goncharova, since 2016 data on co-owners have not been disclosed. In 2021, the operator’s profit amounted to 88 million rubles. with revenue of 766.7 million rubles.

Experts agree that Pevek will play an important role on the Northern Sea Route (NSR). “Given that Rosatom is well aware of the hydrological conditions of Pevek, building a port through a state corporation looks reasonable,” says Sergey Grishunin, managing director of the NRA rating service. He suggests that a new quay wall will be built in Pevek, so that the current operator will be able to “maintain their positions” after construction is completed.

Dmitry Baranov, the leading expert of Finam Management Management Company, notes that, relative to the capacity of other ports of the NSR, Pevek “can be considered large”. “The port was built to serve the NSR, develop the Arctic, extract various minerals, in particular tin,” he says.

Since the FNPP is located in the water area, Rosatom will monitor safety, the expert continues. The interaction between the operator and Rosatom, in his opinion, can be mutually beneficial, since both of them are interested in increasing the port’s cargo turnover. “It is possible that later the port operator may be acquired by Rosatom,” Baranov believes.