Deripaska Weighing Udokan Bid

Billionaire Oleg Deripaska is considering a bid for a huge Siberian copper field that may pitch him into competition or partnership with Russian Railways and Norilsk Nickel.

Daniel Major, head of the resources division of Deripaska's Basic Element company, said Thursday that the firm would make a final decision next week on whether to participate in the July 17 contest for the Udokan deposit.

He said Basic Element would also consider participating in a joint venture to develop Udokan, which could produce equivalent to 15 percent of the country's current annual copper output.

"We haven't internally yet fully decided our position, but that doesn't preclude us either way," Major said. "It's the biggest copper deposit in Russia, so we'd be crazy not to be interested in it."

The starting price for the auction is 4.5 billion rubles ($194 million), and all bidders must register their interest by Wednesday. The Natural Resources Ministry estimates that Udokan contains 13.4 million tons of extractable copper.

Norilsk Nickel, the country's largest copper miner, has said it will bid for Udokan. Russian Railways and Russian Technologies are also potential bidders.

The cost of developing the project and related infrastructure has led analysts to suggest a consortium might win.

"It is a large amount of risk to take on. The technology is interesting — it's not a simple copper project technologically — and therefore diversification of risk is not a bad thing."