A new deal between one of Russia’s largest mining company’s and the Vancouver office of engineering firm Fluor Canada Ltd.highlights potential business opportunities between the two mining jurisdictions.
In late October, Fluor Corp. (NYSE:FLR) announced that it had been awarded an initial contract by Baikal Mining Co., a subsidiary of Russian mining heavyweight Metalloinvest, for the definition phase of the Udokan copper deposit development project in Russia.
The deal’s value has not been disclosed – but, according to Metalloinvest, the deposit is the world’s third largest undeveloped copper deposit.
On a recent trip through Vancouver to develop the partnership with Fluor, Metalloinvest CEO Andrei Varichevtold Business in Vancouver that the geographic challenges in the project mirror challenges faced in northern Canada.
“The project is in a continuous permafrost, where it’s very cold in winter, down to -55 degrees C, and it’s a seismic zone. Who else in the world instead of Canadian specialists know and have a practice [to deal with these challenges]?”
Varichev added that there’s wider potential for deals between Russia and B.C.’s mining sector, and emphasized B.C.’s expertise in mining technology and engineering.
“Russia has high-level resources companies. Canada is the same. Both sides could live and grow separately, but if people have contact and start sharing technologies, they’ll grow faster.”
Varichev said Russia has yet to see much Canadian investment in its resource sector.
He added that while most global investment funds are currently focused on African deposits, which are usually higher grade, Russia offers more stability.
Vladimir Trifonov, CEO of the Canada-Russia Business Council, joined Varichev on his Vancouver visit. He said Canada’s resource sector has already seen some Russian investment, including the 51% Russian ownership of Toronto-based Uranium One Inc.(TSX:UUU).
The company’s major Russian shareholder is JSC Atomredmetzoloto, a subsidiary of Rosatom, the Russian state corporation for nuclear energy.
But Trifonov said Russian investment in Canada has decreased since the economic downturn.
Gavin Dirom, president and CEO of the Association for Mineral Exploration BC, said business ties between Russia and Canada’s mining sectors are strengthening.
“There are numerous Canadian companies based in British Columbia that are exploring mineral development opportunities in Russia as well as developing business relationships with Russians that wish to invest in Canada. The Canadian companies that are involved range from junior explorers to major miners as well as consultants and suppliers that are offering technical, legal and financial expertise.” •