Rosatom invites investors in producing projects

Nadezhda Ivanova's picture

Rosatom, which in the 2000s monopolized the entire uranium production in Russia, is ready to invite investors in their uranium projects. The state-owned corporation has allowed the uranium mining holding company Atomredmetzoloto (ARMZ) to search for partners and creditors for the construction of a new mine in Krasnokamensk. Prior to that, Rosatom used another strategy: the parent company of the nuclear power complex – Atomenergoprom – was engaged in attracting funds, and then it funded the state-owned corporation’s structures.

The included in Rosatom uranium miner ARMZ explores options for attracting foreign investors and debt financing for the construction of the mine №6 at Priargunskoye industrial mining and chemical union in Krasnokamensk in the Trans-Baikal region. As ARMZ reported to the Kommersant, major state-owned companies and banks are considered as investors, while "taking into account the minimization of project risks and structuring project finance the mine №6 can be registered as a separate subsidiary". One of the creditors and investors can become VEB, the Interfax reported yesterday. In December 2016, ARMZ proposed VEB to issue a project loan in the amount of 12 billion rubles for seven years and to create a SPV-company for the development of the mine. The financial state-owned corporation was proposed to enter into the capital of the company: the contribution is 160.7 million rubles, 3.9 billion rubles more will be funds of "other potential investors", 1.46 billion rubles will be own funds, the state subsidies for the infrastructure will make up 2.46 billion rubles. The total project cost is 19.3 billion rubles, taking into account the already spent 742 million rubles.

The Kommersant’s source, familiar with the situation, says that VEB is still considering the proposal of ARMZ. Another source of the Kommersant believes that the provision of such financing corresponds to the new strategy of VEB, and doesn’t rule out that in the end it will be issued. VEB declined to comment.

Priargunskoye industrial mining and chemical union mines uranium in Krasnokamensk since 1968, now pits at the mines №1 and №8 operate. The Priargunskoye industrial mining and chemical union’s forecast of the uranium production for 2016 is 1.87 tons, at the same time, for the first time in a long time the company expected a nominal net profit in the amount of 4 million rubles (in 2015, the loss made up 3.5 billion rubles.). The traditional problem of the company considers being high cost of the mine production, which already 2014 was estimated by head of ARMZ Vladimir Verkhovtsev at $68 per pound. Now the Kommersant’s source in the industry assures that the uranium mining at the Priargunskoye industrial mining and chemical union is estimated at the level of 4 thousand rubles per kilogram ($30 per pound). However, the world prices for uranium, collapsed in 2011 after the accident at the Japanese nuclear power plant Fukushima-1, are still significantly less: at the end of last year, the spot prices fell to the anti-record of $18.75 per pound, in early February, according to UxC, they grew to $26. Analysts regularly predict that the market should start to recover, but the expectations are not met from year to year - in particular, because of stop of Japanese nuclear power plants, high stocks in China and the excess of the supply over the demand.

But for Rosatom, the development of the Priargunskoye industrial mining and chemical union is not only commercial, but also a social challenge, the Kommersant’s interlocutors in the industry recognize: the stop of the production at the old mines will lead to the closure of company town. Until now, the main way to support the asset by the state-owned corporation was the direct funding - in particular, due to additional emissions of the Priargunskoye industrial mining and chemical union (the next placement should bring up to 3.1 billion rubles to the company). But at the same time Rosatom has focused at attraction of debt capital in Atomenergoprom - the parent company of the civilian part of the state-owned corporation, then subordinate structures received the money from a single treasury. For the development of the mine №6 Rosatom gave a special permission to seek the external funding, explain the Kommersant’s interlocutors. One of them notes that it is easier to attract investors and loans for the project, where a lower prime cost of the production is supposed, than for Priargunskoye industrial mining and chemical union as a whole.

  • Minerals
  • Uranium
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