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. Last Updated: 07/27/2016

Copper Deposit to Go On Sale in Spring '06

Russia will most likely hold an auction for rights to tap one of the world's biggest copper deposits, Udokan, in Siberia, in spring 2006, a Natural Resources Ministry spokesman said on Tuesday.

The spokesman said it was impossible to hold the auction earlier because Russia's new subsoil law, which seeks to bar foreign companies from certain mineral assets such as Udokan, would not come into force this year.

"Because amendments to the subsoil law ... will be passed only in the fall, the law is unlikely to take effect before January. Therefore, the auction cannot technically take place until March or April 2006," he said.

Officials had earlier said that the auction for one of Russia's most lucrative mining assets might take place as soon as November.

Udokan lies in the Chita region on Russia's border with China and is estimated to contain some 20 million tons of copper.

Russia's second-largest copper producer, Urals Mining and Metals Co., and Norilsk Nickel have expressed interest in the asset.

Chinese companies are also believed to be interested.

Russia has long been planning to change its outdated mineral resources, or subsoil use, law and investors have welcomed many changes in the draft, such as the automatic allocation of a production license to the firm that discovers a deposit.

But optimism faded after President Vladimir Putin demanded limits to foreign access to strategic deposits to avoid compromising the state's defense and security. Analysts said that was a clear sign of the Kremlin tightening its grip over the economy.