The Irkutsk Region’s Priority Projects

The Irkutsk region has the Russia’s largest industrial complexes: the fuel-and-energy, mining, timber-industry and petrochemical complexes.

     As of today, industrial enterprises  of the Irkutsk region are characterized by a high proportion of depreciated fixed assets. This is due to the inadequate size of capital placements or investments directed toward reproduction of these assets.

     A significant requirement for investments is observed in the industrial sectors of electrical power engineering, non-ferrous metallurgy, coal mining industry, and timber and wood-working industry, as well as mechanical engineering and metal working. It should be noted that these sectors of the economy have the greatest proportion in the total volume of export earnings.

     To sustain competitiveness of products manufactured by enterprises of the Irkutsk region requires putting the technological base into correspondence with the level thereof in major competitors in the domestic and external markets.

     Thus the Irkutsk region’s industry has a need for the attraction of investments for the reconstruction, modernization and creation of new production facilities on the part of national as well as foreign investors.

     The project is intended to organize in the region – in a phase-by-phase manner, on the basis of enterprises of the Irkutsk region and the Republic of Buryatia – a deep processing of quartz raw materials from deposits of east Siberia, in order to attain priority positions as regards extraction, manufacture and sales of products from specially pure quartz raw materials, through the pursuance of the following kinds of activity:

– exploitation of active deposits of specially pure quartzites (“Bural-Sardag”, Eastern Sayan), and veiny and granulated quartz (“Patom”, Bodaibo district), and search and organization of the extraction of new unconventional natural sources of chemically pure and readily concentrated quartz raw materials;

– development of high technologies for concentration of quartz raw materials and obtaining of “solar” grades of silicon by the method of direct carbothermic reduction;

– organization of productions of specially pure quartz concentrates, multicrystalline silicon (multisilicon) for solar power engineering, quartz crucibles for growing ingots of mono- and multisilicon, silicon plates for photoelectric converters of current (PEC), and PEC and household self-contained power supply systems of “solar” power engineering (addressed in separate business plans).

The project comprises 2 phases of implementation.

Project phase I – commissioning of the capacities for pilot-industrial production of quartz middlings for the annual program of 500 t/year. Erection and start-up and adjustment work is currently underway).

Project phase II – commissioning of the capacities for production of solar-grade silicon and multisilicon for the annual program of 4000 t/year.

The cost of the project is: phase I = 5 000 thous. rbls, phase II = 15 000 000 USD.

     The merits of the project are:

     1. The technological justifiability of the project is supported by many years of research and development work done at the Institute of Geochemistry SB RAS in the field of searching the raw materials base of highly pure quartz raw materials, and refining processes of industrial silicon in melt and of obtaining polycrystalline silicon with columnar structure (multisilicon) protected by patents and forming the basis of the project.

     The technology that has been developed for concentration of quartz middlings has been successfully tested in a number of enterprises of Russia resulting in obtaining pilot lots (technological samples) of quartz middlings. The testing results were used to upgrade the flow chart of obtaining “solar-grade” silicon. The technology of obtaining multisilicon was tried out on growth furnaces of the Institute of Geochemistry and protected by patents. Multisilicon samples of scrap were obtained and tested for compliance with the requirements.

     2. The availability of the own raw materials base with sufficient balance reserves of high quality quartz raw materials, protected at TKZ, with purchased equipment for project phase I, the construction and erection  work at the completion stage, and with the existence of trained key specialists.

     3. The existence of preliminarily agreed-upon decisions as to the execution of design work related to the reconstruction of the OOO “AEMZ” industrial site (Angarsk) to accommodate the production facility for “solar-grade” silicon, and the ISC SB RAS industrial site (Irkutsk) to accommodate the production facility for multisilicon; as well as the designing and delivery by OAO “VNIIETO” (Moscow) of the 7 MW ore-smelting furnace with the gas cleaning system, and the delivery by OAO “KrasMash” (Krasnoyarsk) of equipment for growth and cutting of multisilicon ingots.

      4. The sales market for products of phase I has been formed in the process of conducting technological tests to pilot lots (technological samples) of raw materials. Tests of technological samples are promising and speak in favor of the competitiveness of the products under the project with the products manufactured by the firm Unimin (USA) of lota St + lota 4 quality.

     The planned production program is balanced with the need of major customers of quartz middlings, Russian enterprises. (OAO “PKhMZ” (Podolsk) – production of quartz crucibles for growing monocrystalline silicon – 150 t/year; OAO “Lisma” (Saransk) – production of lighting items – up to 2000 t/year; OAO “OChKS Plant” (Gus-Khrustalny) – production of  diffusion tubes  – up to 100 t/year; and FGUP “GKhK” (Krasnoyarsk-26) – production of quartz crucibles for growing monocrystalline silicon – up to 500 t/year).

     The internal need for the manufacture of quartz crucibles for growing multisilicon constitute up to 500 t/year.

     Export deliveries – formation of the market of microelectronics products – up to 50 t/year.

     The sales market for phase II products – multisilicon that ensure the efficiency of the photoelectric converter of current at a level of 13-15%, according to estimates made by Planetary Engineering Group Earth, increases every year by 25% and is predicted to reach 18 000 t by the year 2012, which is practically unlimited for the production volumes under the project.

     Proposal to the investor: It is planned to issue the charter capital of OOO “Quartz technologies” from 24 500 thous. rbls to 99 500 thous. rbls with the shared participation of the investor in the amount of 51.7% of the charter capital (contribution 51 500 thous. rbls). Furthermore, it is intended to utilize a credit in the amount of $18 000 000, with the repayment period of 4 years, at the interest rate agreed upon by the parties, and with the interest payment terms.

     There is a need for a bilateral discussion of the matter related to the investor’s withdrawal / further participation in the implementation of project phase III from the time of final settlement for phase II.

     The chief objectives of the project are:

·       to attract investments for technological reequipment of the existing capacities for logging;

·       to construct new facilities for outputting sawn timber using state-of-the-art equipment;

·       to carry out technological re-equipment of wood chemistry enterprises in Zima, Irkutsk region.

     The project is implemented within the comprehensive program of development of the wood chemical complex that includes the following technological stages and enterprises:

·       timber logging and forest rehabilitation in the volume of 400 000 cub. m per year on the territories of the Zima, Balagansk and Kuitun districts;

·       the enterprises specializing in sawn materials and finished products in the volume of up to 153 000 cub. m per year, with partial utilization of waste to obtain process heat. This enterprises includes the facilities for sawn materials in a broad range, and products based on cementing nonstandard sawn materials or on special orders;

·       the chemical enterprise specializing in deeper processing of wood waste to obtain a gamut of products: dihydroquercytine, oxalic acid, quercytine, industrial carbon, native resins (222 t/year), and arabinogalactane (770 t/year);

·       products of an ancillary nature: transport, and carrying out construction and repair work.

     The following parts of the project have been implemented to date:

     – The enterprise has been set up for timber logging; capital expenditures in the amount of 14.3 US dollars have been incurred.

     – The enterprise for wood processing has been set up and modernized; capital expenditures in the amount of 22.4 US dollars have been incurred.

     Equipment of Italian and German manufacture has been introduced in the enterprises. In spite of the high technology equipment in use, the volumes of waste (as large as 40%) are significant, starting from the root system to timber sawing waste.

     The technologies of the third part of the project will permit an almost 100% processing of waste to obtain a broad gamut of products.

    Raw materials for this range of products are provided by lignine and waste of large wood and other coniferous tree species.

     To implement the project it is planned to utilize the idle facilities of the Zima plants: the hydrolysis plant and the colophony-extraction plant that were previously based on similar chemical-technological processes using wood as raw material.

     The selection of  the above-mentioned facilities is based on results from analyzing the affinity of technologies, the raw materials used, the design features of buildings, and of a part of equipment.

     In accordance with the implementation schedule of the comprehensive project, the commissioning periods of the facilities are planned to be as follows:

     – dihydroquecytine – 3.3 t/y (2002-2004)

     – oxalic acid – 50.0 thous. t/y (2005-2008)

     – industrial carbon – up to 50.0 thous. t/y (2003-2005)

     – quercyne – 30.0 thous. t/y (2004-2005)

     – native resins – 22.0 t/y (2003-2004)

     – arabinogalactane – 70.0 t/y (2003-2004)

     – dihydroquercytine – 30.0 t/y (2006-2008)

     In accordance with the estimated expenditures, the cost of the project is estimated at 26.7 million US dollars, including the production of dihydroquercytine – 3.156 million US dollars.

     The spheres of application of products of the chemical complex:

     Dihydroquercytine – food industry, manufacture of biologically active additives.

     Native resin – raw material for the pharmacological industry, manufacture of turpentine, tailic oil, colophony, etc.

     Arabinogalactane – raw material for the manufacture of  medical preparations, fermentative synthesis, manufacture of composite and expensive paints, and manufacture of high quality paper and pressboard.

     Native wood bipolymer – raw material for the manufacture of feed for cattle, manufacture of monocrystalline cellulose pulp, activated carbon, etc.

     The period of recoupment of the projects is 2-3 years, and the net profit amounts to 188 292 thous. US dollars.