Deripaska Withdraws Udokan Bid

The mining unit of billionaire Oleg Deripaska's Basic Element holding company has withdrawn from an auction for the huge Udokan copper deposit in Siberia, the company said Tuesday.

Strikeforce Mining and Resources said it would be "economically inexpedient to participate in the tender independently."

The Natural Resources and Environment Ministry is scheduled to award the Udokan field, which contains more than 13 million tons of copper, in a Sept. 17 auction. It has set the starting price at 4.5 billion rubles ($178 million) and said about $1.6 billion would be required to bring the deposit into production.

SMR said in June that it planned to bid through the Sorsk Mining and Processing Complex, one of its two ferro-molybdenum plants that together account for 4 percent of world demand for copper. In Tuesday's statement, the company said it had notified the Federal Subsoil Resource Use Agency of its withdrawal from the tender.

The remaining bidders include Metalloinvest, the iron and steel company founded by billionaire Alisher Usmanov, which has said it will team up with state conglomerate Russian Technologies to develop the field should it win the tender. Russian Technologies has said it might also invite Norilsk Nickel to participate in the consortium.

The Russkaya Med, or Russian Copper, consortium comprising Russian Railways and Urals Mining and Metals, Russia's second-largest copper producer after Norilsk, is also bidding.