Tapping Kazakhstan's copper with JV
By Eric Onstad |
April 27, 2010, Tuesday
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Print Edition
Print Edition
KAZAKH copper miner Kazakhmys has agreed a joint venture for one of its major projects with China's Jinchuan Group Ltd, to share the high costs with a company located in the world's biggest copper-consuming nation.
Kazakhmys, the world's eighth-largest copper producer, said yesterday that it would sell a 49 percent stake in its Aktogay project in the east of Kazakhstan to Jinchuan for US$120 million.
The two firms will share development costs, estimated at US$1.5 billion to US$2.0 billion, of the project which is due to produce 100,000 tons of copper concentrate per year.
That would boost current output by around a third.
"Kazakhstan's extensive infrastructure and proximity to the Chinese market has been central in taking these projects forward," said Chief Executive Oleg Novachuk.
The project, seen as a large open pit mine, is located in the Ayoguz region of Kazakhstan.
Kazakhmys bills Aktogay as one of the leading undeveloped copper deposits in the world, with contained copper of nearly 5 million tons to support a mine life of 40 years.
A feasibility study is due to take about a year, after which mine construction will last three additional years, it added.
Jinchuan produces a range of non-ferrous metals, but its biggest products are nickel and platinum group metals, accounting for more than 90 percent of China's total output of those products.
Kazakhmys said last month it expected lower tax rates this year after high taxes and sliding metal prices led to it missing 2009 profit forecasts with a halving of consolidated earnings per share.
The firm also said it was able to pursue its expansion projects after cutting net debt to US$689 million from US$1.63 billion a year earlier.
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