* Russia in deal with Iranian bank facing sanctions
* To develop one of the world's largest zinc mines
(Adds confirmation from Russian Energy Ministry, background)
By Vladimir Soldatkin and Thomas Grove
MOSCOW, Sept 20 Russia has agreed to develop an
Iranian zinc deposit that is among the largest in the world in a
deal involving an Iranian bank facing international sanctions,
its Energy Ministry said on Tuesday.
The agreement to develop the Mehdiabad zinc and
lead deposit was reached at a trade meeting on Sept. 11 that
brought Russia's Energy Minister Sergei Shmatko to Iran, the
ministry said in emailed comments.
Russia, whose biggest gas firm once withdrew from Iran's
energy sector due to tightening international sanctions, built
the Islamic state's Bushehr nuclear power plant, which joined
the grid earlier this month.
"The parties agreed to develop cooperation on a project
involving the construction of a mining plant and exploitation of
the Mehdiabad zinc and lead deposit," the ministry said.
Citing a source close to the talks, popular business daily
Kommersant said the project's cost was estimated at $1
The deal calls for a joint venture linking state
conglomerate Russian Technologies, Russian firm KAPSAD
international and Iran's Saderat Bank, which faces U.S. and
United Nations sanctions.
Kommersant said the deal was being shepherded by powerful
Deputy Prime Minister Igor Sechin.
The source said Iran was insisting on participation of the
state-owned export-focused Saderat Bank, which was named in a
2008 U.N. Security Council resolution, approved by Russia, that
tightened sanctions on Tehran for its nuclear activities.
The Security Council urged states to "exercise vigilance"
over the bank's activities abroad to avoid contributing to
"proliferation-sensitive nuclear activities, or to the
development of nuclear weapon delivery systems."
Two years earlier, the United States had barred the bank
from any direct or indirect dealings with U.S. institutions
citing it as a "significant facilitator" of the financial
activities of the Islamist group Hezbollah.
Veto-wielding permanent member Russia has backed four
successive rounds of Security Council sanctions against Iran
over its nuclear programme, which Western nations fear is aimed
at acquiring weapons.
But it has worked with China to water down the resolutions
and has criticised additional sanctions imposed by the United
States and European Union, saying they could undermine efforts
to persuade Iran to rein in its nuclear activities.
While Russia is a member of the six-nations seeking to
engage Tehran on its nuclear programme, it has warmer ties with
Iran than Western nations do. Its state-run gas giant Gazprom
said last week it may take part in developing an
Iranian oil field.
Under the U.N. resolution, vigilance over the bank's
activities is limited to its activities abroad, limiting the
scope for opposition to the reported project.
Deposits at the Mehdiabad reserve, near Yazd in central
Iran, amount to 394 million tonnes of zinc, lead and silver, it
Development rights until recently belonged to Mehdiabad Zinc
Co, which had Australian partners, but the report said that its
licence had been recently revoked.
(Additional reporting by Gleb Stolyarov; Editing by Matthew