Russian billionaire Roman Abramovich has bought a production license for a large cement rock deposit in the Urals and plans to build a $500 million plant, a business daily said on Friday citing a local official.

Millhouse Capital, which runs the businessman's assets, will build a plant in the Perm Territory to produce 2 million metric tons of cement annually by 2011, Vedomosti said.

The holding's earlier acquisitions in the industry include a cement rock deposit in the southern Russian region of Rostov last year, whe

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re it could also build a plant, and a 44.6% stake in Eurocement, Russia's largest cement producer, in 2006.

Deputy head of the Perm Territory administration, Yury Utkin, confirmed the plans, but did not give further details. Millhouse spokesman John Mann has refused to comment, the paper said.

Experts quoted by the paper said the move was a logical one, as cement consumption in the Urals is set to exceed target levels this year. An Inteco Group executive, Mikhail Bogush, said cement could be conveniently shipped to northwestern regions and Tatarstan, with booming construction industries, Vedomosti said.

Others are more skeptical about the deal, saying the existing cement producing plants have met the Perm Territory's demand, and a new one is being built in the area, the daily said.

"Cement prices could plummet as new plants come into operation en masse," Yelena Myazina, an analyst with Unicredit Aton, told the paper.

Prices for cement in Russia hit $203 per metric ton in April, but have since been falling. As of July, prices averaged $181.

MOSCOW, July 4 (RIA Novosti)