June 5 (Bloomberg) -- The Russia-China Investment Fund, set up by the two countries’ sovereign wealth funds, plans to invest in a zinc and lead mining project close to their border, people with knowledge of the discussions said.
The fund is considering acquiring a stake in the Noyon-Tologoisky project, located near the Siberian city of Chita, said the people, who asked not to be identified as the information is private. It won’t fund the full project cost, estimated at $200 million, one of the people said.
Russian President Vladimir Putin is stepping up business cooperation with China as U.S. and European sanctions over the Ukraine crisis weaken the country’s economy. Last month, Putin reached a $400 billion deal to supply gas to China through a new pipeline over 30 years, a milestone in relations between the world’s largest energy producer and the biggest consumer.
The Russia-China Investment Fund was set up in 2012 with $2 billion of initial capital from China Investment Corp. and the Kremlin-backed Russian Direct Investment Fund, according to its website. It seeks returns of at least 20 percent on investments in companies benefiting from growing trade between the two nations, the website shows.
A spokeswoman in the Russian Direct Investment Fund’s press service, who asked not to be named citing company policy, declined to comment. CIC’s Beijing-based press office didn’t answer an e-mail and phone call seeking comment.
The joint fund has invested $200 million so far, RDIF Chief Executive Officer Kirill Dmitriev said while attending the Boao conference in China in April. It will invest in a toll bridge connecting the two nations along with projects in the mining, agriculture and tourism industries, according to Dmitriev.
CIC already has investments in Russian mining. It holds stakes in OAO Uralkali, the largest potash producer, and Polyus Gold International Ltd, the largest gold miner.
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