The Russian Direct Investment Fund (RDIF), the Russia-China Investment Fund (RCIF) and a Middle Eastern sovereign wealth fund have collectively invested in a 9.53% shareholding in metals and mining company Intergeo.
The investment is included in the list of the Intergovernmental Russian-Chinese Commission on Investment Cooperation initiated by RDIF and the Chinese Investment Corporation (CIC) in 2014 to promote cross-border investment projects. The investors will nominate Alexander Khloponin and Lev Kuznetsov as their representatives on the board of directors of the company.
The RCIF is a private equity fund that aims to generate competitive returns by investing in projects that advance bilateral economic cooperation between Russia and China.
The fund received US$2 billion in commitments from RDIF and CIC in equal measure, with up to an additional US$2 billion expected to be raised from international institutional investors. RCIF focuses on projects that foster economic cooperation between the two nations and will invest at least 70% of its capital in Russia and CIS countries and up to 30% in China.
The Russian Direct Investment Fund (RDIF) is Russia’s sovereign wealth fund with reserved capital of US$10 billion under management. It makes direct investments alongside prominent global investors, acting as a catalyst for direct investment in Russia.
The investment in Intergeo will promote further growth in the company's business, including the development of the Kingash and Ak-Sug polymetallic deposits, located in the Krasnoyarsk Territory and the Tyva Republic in Russia respectively. They have significant reserves of copper, nickel and a number of other non-ferrous metals. Kingash is the second-largest nickel deposit in Russia, while Ak-Sug is one of Russia’s top five in terms of copper reserves. Total investments in the project - aimed at developing the fields and constructing associated infrastructure - will exceed 178 billion Russian rubles (US$2.8 billion).
Kingash’s mineral resources include 2.4 million tonnes of nickel, 1.1 million tonnes of copper, 98,000 tonnes of cobalt, 52,000 tonnes of gold and 261 tonnes of platinum group metals. The planned annual capacity of the mining and processing plant will be 520,000 tonnes of copper-nickel concentrate. Production is expected to begin in 2024.
Ak-Sug’s mineral resources include 5.1 million tonnes of copper and 121 tonnes of gold. The planned annual capacity of the mining and processing plant is 500,000 tonnes of copper concentrate. Production is expected to start in 2023.
“As part of our work within the Intergovernmental Russian-Chinese Commission on Investment Cooperation, established on the initiative of RDIF and the Chinese Investment Corporation to promote cross-border investment projects, we have attracted investments from Chinese investors in a Russian greenfield project aimed at creating, through Intergeo, one of the largest companies in the Russian non-ferrous metals sector,” comments Kirill Dmitriev, CEO of the Russian Direct Investment Fund (RDIF).
He adds that the project is also expected to attract funding from a number of Chinese banks. It will give significant impetus to the economies of the two Russian regions, while the company's products have significant export potential, including in the Chinese market.
“We are implementing a very ambitious project - creating, from scratch, the largest mining enterprise in modern Russia, focused on a new, rapidly developing segment of non-ferrous metallurgy, the production battery metals,” said Dmitry Privalov, CEO of Intergeo.
“The project includes the design and construction of two of the world’s largest ore mining and processing plants in underdeveloped regions of Russia. This will not only create a new industry leader, but is also a major economic development for our region. We are confident that the arrival of new partners will allow us to realize our greatest ambitions both in the Russian and the promising Asian markets,” he added.
Intergeo Management Company LLC was established in 2007 in order to consolidate and develop promising non-ferrous metal deposits in Siberia and the Far East. The company's assets include four mining licences, on the basis of which the Ak-Sug and Kingash projects are being developed.