The Baikal Pulp Mill, which produces 200,000 metric tons of pulp and 12,000 metric tons of paper per year, has been accused of discharging large volumes of toxic waste into the lake since it was built in the 1960s.
Mill owner Continental Management, a subsidiary of billionaire Oleg Deripaska's industrial conglomerate Basic Element, spent 290 million rubles ($11.4 million) on the closed water cycle project.
Environmental watchdog Rosprirodnadzor imposed in early December 2007 a five-day ban on the dumping of waste into Lake Baikal from the mill, and filed a lawsuit against the company for damages of over 475 million rubles ($19.9 million). The watchdog eventually increased the size of the legal claim to 4.2 billion rubles ($176 million).
The governor of the Irkutsk region, Alexander Tishanin, called on the government earlier this year to remove the pulp mill from the lake, echoing demands by environmental activists.
Baikal, called the Sacred Sea by locals for its size and beauty, is the world's oldest and deepest lake, having formed an estimated at 25 million years ago. A UNESCO World Heritage site, it holds around 20% of the planet's freshwater and is home to hundreds of unique species of fauna and flora.