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Kazakhmys PLC (KAZ)

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Monday 26 April, 2010

Kazakhmys PLC

KAZAKHMYS PLC SIGNS MOU WITH

RNS Number : 7463K
Kazakhmys PLC
26 April 2010
 



 

 

26 April 2010

 

 

KAZAKHMYS PLC SIGNS MOU WITH JINCHUAN TO DEVELOP THE MAJOR COPPER 
PROJECT AT AKTOGAY

 

 

Kazakhmys PLC ("Kazakhmys" or the "Group") announces that it has signed a memorandum of understanding ("MOU") with Jinchuan Group Ltd ("Jinchuan") of the People's Republic of China to create a joint venture to develop the Group's major copper growth project at Aktogay (the "Project").  Subject to the parties completing an investment agreement and regulatory and other approvals, Jinchuan has agreed to purchase a 49% stake in the Project for $120 million, payable in cash.

 

Following establishment of the joint venture, a feasibility study will be conducted on the Project, which should take around 12 months to complete.  The Project will then enter into development and construction, which is anticipated to take around three years. Aktogay has an estimated development cost of $1.5 to $2 billion and is expected to produce around 100 kt of copper in concentrate each year, with a mine life of approximately 40 years.

 

Oleg Novachuk, Chief Executive of Kazakhmys, said: "We are delighted to be moving ahead with our second major copper project.  Aktogay should produce around 100 kt of copper in concentrate each year, which is similar in size to our development at Bozshakol.  These two projects are equivalent to 60% of our current production, significantly increasing our output in the next five years.  Kazakhstan's extensive infrastructure and proximity to the Chinese market has been central in taking these projects forward and we are pleased to have secured such a key partner as Jinchuan."

 

For further information please contact:

 

Kazakhmys PLC



John Smelt

Head of Corporate Communications

Tel: +44 20 7901 7882

Tel: +44 78 7964 2675

Irene Burton

Financial Analyst

Tel: +44 20 7901 7814

Zulfira Mukhamedyarovа

Senior Manager - Media Relations

          Tel: +77 27  266    317

Merlin



David Simonson


Tel: +44 20 7726 8400

Tom Randell


Tel: +44 20 7726 8400

Leonid Fink


Tel: +44 20 7726 8400

 

- ends -

Notes to Editors

Aktogay deposit

The Aktogay deposit is a large open-pit mine and concentrator project located in the Ayoguz region in the east of the Republic of Kazakhstan.  Aktogay is one of the leading undeveloped copper deposits in the world, with contained copper of nearly 5 million tonnes and by-products.  The Project is forecast to have annual production of around 100,000 tonnes of copper in concentrate, which supports a mine life of approximately 40 years.  The mine site is situated 25 km east of the village of Aktogay, 250 km south south-west of the District centre of Ayoguz and 500 km south south-east of Ust Kamenogorsk.

 

The pre feasibility study work that has been completed includes work on the exploration, metallurgical tests and engineering studies.  The Project has the following infrastructure:

·        Railway spur and a rail switching yard that has a 100 tonne capacity gantry crane installed overhead

·        Road access

·        Three large warehouse facilities and a 60 man camp

·        Gravel crusher, concrete batch plant and an asphalt plant

·        220 kV power transmission line and electrical distribution, including a step down transformer and a ring bus power line to the mining area and industrial site

 

A feasibility study should commence during 2010 which is expected to take 12 months to complete.  Thereafter, the capital investment programme should commence which is expected to cost between $1.5 and $2.0 billion. The development phase will take around 3 years to first production.

 

Kazakhmys

Kazakhmys PLC is a leading international natural resources group with significant interests in copper, gold, zinc, silver, power generation and petroleum.  It is the largest copper producer in Kazakhstan and one of the top ten worldwide with 15 operating mines, 10 concentrators and 2 copper smelters. Kazakhmys Copper operations are fully integrated from mining ore through to the production of finished copper cathode and rod. Total copper cathode equivalent produced in 2009 from own ore was 320,000 tonnes. Production is backed by a captive power supply and significant rail infrastructure.

 

Kazakhmys Copper produces significant volumes of other metals, including zinc, silver and gold. In 2009, it produced 149,000 tonnes of zinc in concentrate. The Group is in the top ten largest silver producers in the world (17 million ounces produced in 2009).

 

Kazakhmys Power has a 50% interest in the coal fired Ekibastuz GRES-1 plant, the largest in Kazakhstan with a nameplate capacity of 4,000 MW.

 

Kazakhmys Petroleum is continuing its work programme at the East Akzhar exploration block, located on the eastern fringe of the Caspian depression, which was acquired in April 2007.

 

The Group is part of the FTSE-100 index of companies listed on the London Stock Exchange and is also listed on the Kazakhstan Stock Exchange (KASE). It had revenues of $3.7 billion in 2009 with EBITDA of $1.6 billion. The Group employs some 62,000 people, principally in Kazakhstan. The Group's strategic aim is optimise its current operations, deliver its major growth projects and to diversify and participate in the development of the significant natural resource opportunities in Central Asia.

 

Jinchuan

Jinchuan Group Limited is a large integrated non-ferrous metallurgical and chemical engineering enterprise engaged in mining, concentrating, metallurgy and chemical engineering. It produces nickel, copper, cobalt, rare and downstream precious metals and also some chemical products, together with some further processed nonferrous metals products. Jinchuan's output of nickel and platinum group metals respectively accounts for more than 90% of China's total output of these products.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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