Copper concentrate production has commenced at Russia's largest undeveloped copper deposit, Udokan, following a ceremony attended by President Vladimir Putin via video link. This project, located in Russia's far east, is coming online at a difficult time, as the United States imposed sanctions on its operator, Udokan Copper LLC, in April due to Russia's actions in Ukraine. Adding to the challenges, copper prices saw a 14% decrease in 2022 and have remained flat this year because of weaker than anticipated demand.
The Udokan project relies heavily on demand from China, a major metals consumer, and on the future demand driven by the global green energy transition. The processing plant is designed to produce sulphide copper concentrate with a metal content of 40% to 45%, with commercial sales expected to begin this year. The company has not yet disclosed its potential buyers. By 2024, with the launch of the first stage of the metallurgical plant, Udokan aims to process up to 15 million metric tons of ore annually, yielding up to 150,000 tons of copper in the form of copper cathode and concentrate.
The Udokan deposit, discovered in 1949, holds an estimated 26.7 million tons of copper resources, making it the largest in Russia. Its development was historically challenging due to the complex nature of its ore and the lack of suitable extraction technology. Russian billionaire Alisher Usmanov acquired the development rights for $500 million before the 2008 financial crisis. The project required a decade to overcome technical hurdles, create a new geological model, and commence construction. By 2028, Udokan plans to expand its mining and metallurgical complex, increasing annual capacity to between 24 million and 28 million tons of ore and up to 450,000 tons of copper.
