Reuters reported that Aricom which mines iron ore in Russia's Far East is in talks with China Metallurgical Group Corp about building a USD 200 million to 300 million plants to treat ore from a major new deposit.

According to the report, the plant which is scheduled to start operating in 2011 will be a key asset in London-listed Aricom's plans to become a significant supplier of iron ore across the border to China, where one-third of the world's steel is produced.

Mr Jay Hambro CEO of Aricom said that “We are asking them for a fixed price, turnkey contract, which means that a lot of the credit risk in terms of the project finance moves onto them. Any resulting construction contract would be a significant step forward for the development of the Aricom project portfolio.”

Mr Hambro added that “We are looking at the option of trying to reduce external funding requirements.”