Nordgold will invest $321 million in development of Sardana zinc deposit in Russia
By Eugene Gerden
Nordgold, the Russian mining company will invest over 30 billion rubles (US$321 million) in the development of Sardana zinc deposit, one of the largest zinc fields in Russia in terms of reserves, which is located in the Yakutia Republic.
The Sardana deposit occupies an area of ​​6.1 square kilometers. km and is located in a hard-to-reach area of ​​the republic – Ust-Maisky. Its balance reserves are 1.9 million tons of zinc, the estimated reserves are more than 2.2 million tons.
The project is scheduled for implementation during the period of 2026-2030 and also involves the construction of a zinc concentrate plant.
Nordgold’s CEO Georgy Smirnov earlier said implementation of the project will be associated with serious technical difficulties taking into account that the deposit is located far from transport and energy infrastructure facilities and establishment of the needed infrastructure for its development will require a serious support from the state.
In general, implementation of the project is important both for Nordgold, a company, which is owned by a well-known Russian billionaire Alexey Mordashov and Russia, as the current volumes of zinc mining in the country are relatively small.
Earlier the Russian Ministry of Industry and Trade stated in its strategy for the development of Russian metallurgy until 2030, also confirmed the existing problems with zinc production in Russia.
In accordance with the strategy, this year zinc production in Russia should amount to 200,000 tons, while consumption – about 232,000 tons. The annual imports are estimated at 84,000 tonnes, most of which delivered from Kazakhstan.
The largest zinc producer in the Russian Federation is the Ural Mining and Metallurgical Company (UMMC). In 2016, it acquired the Chelyabinsk Zinc Plant, which controls more than 60% of domestic and about 1.5% of global production of this metal. UMMC also owned the Electrozinc plant in Vladikavkaz, but it was closed in 2019 after a fire.
In the meantime, “Sardana” is not the only new zinc project in Russia. In September, production was launched at the Ozerny Mining and Processing Plant (GOK) in the Republic of Buryatia. The project is based on the deposit of the same name, while after reaching its planned capacity in 2025, will process up to 6 million tons of polymetallic ore per year, producing up to 597,000 tons of zinc and up to 82,000 tons of lead concentrate from it. The Ozernaya Mining Company was supposed to launch the mining and processing plant back in 2023, but due to a fire that damaged imported equipment, the start of production was postponed to the Q3 2024. The main shareholder of this project is the owner of Highland Gold, one of Russia’s leading gold mining companies, Vladislav Sviblov, while the estimated investment in it is 92.7 billion rubles.
As for Sardana project, most of independent Russian analysts believe Nordgold will face serious problems during its implementation, as the ever-growing sanctions’ pressure may create serious problems for the supplies of equipment for its needs, primarily from China, as many of Chinese companies have serious fears regarding with their participation in the project.
Finally, the project will face a number of difficulties due to the extreme climatic conditions of northeastern Yakutia, where the field is located. In addition, Nordgold will have to conduct detailed environmental assessments and ensure compliance with all regulations, which could lead to additional costs and delays in the project. According to analysts, changes in tax legislation could also affect capital expenditures of the project.