Renova, Arms Exporter to Buy Zinc Deposit

Billionaire Viktor Vekselberg's Renova Group said Friday that it would buy the country's biggest untapped zinc and lead deposits with state-controlled arms exporter Rosoboronexport.

The companies will buy the Ozernoye and Kholodninskoye deposits in the far eastern republic of Buryatia from the metals venture of Moscow-based investment bank Metropol, Renova said in a statement, without valuing the deal.

The two deposits contain 45 percent of the country's lead and zinc deposits, or about 300 million tons of metal ore. Rusinvestpartner, Renova's venture with the arms trader, will carry out the acquisition as part of a larger power and infrastructure project in the Far East, the statement said.

"The deposits are likely to be expensive to develop, as there's virtually no infrastructure around them," said Vladimir Zhukov, an analyst at Lehman Brothers Holding in Moscow. "I see the buyers as financial investors who will need a mining company as a partner."

Urals Metals and Mining Co., controlled by billionaire Iskander Makhmudov, Russian Copper, and Chelyabinsk Zinc Plant, have the necessary experience, Zhukov said.