Kazakhmys to Develop “Major” Copper Project in North Kazakhstan
Friday 26 August 2011
London (Platts) – Kazakhstan-based miner, Kazakhmys, said Thursday its board had approved the development of a major copper growth project at Bozshakol in northern Kazakhstan, after completion of a feasibility study.
Established in 1930 and focused on copper production, Kazakhmys PLC is among the world’s leading natural resources groups. It is based primarily in Kazakhstan, listed in London, and is a part of the FTSE 100 Index.
In its first half 2011 results statement the miner said the deposit had a mineral resource of 1,173 million mt at an average copper grade of 0.35%, including 832 million mt of measured and indicated resource with an average copper grade of 0.37%. The ore body also contains valuable by-products of gold and molybdenum.
Bozshakol is a green-field development project, close to existing power, transportation and other infrastructure. “Bozshakol will have a production life of over 40 years, with average output of 75,000 mt of copper in concentrate/year, although the production will average 100,000 mt for the first 14 years. At current prices, Bozshakol has a highly competitive operating cost, in the second quartile for copper mines globally,” the statement said.
Kazakhmys noted that Bozshakol would have a three year development phase, which will start by the end of 2011, slightly ahead of schedule. Pre-production mining will begin in 2014, with the first ore to be processed at the associated concentrator during 2015.
The project has a capital cost in the region of US $1.8 billion, and is being funded from the existing $2.7 billion financing facility provided by the China Development Bank and Samruk-Kazyna.
Bozshakol is the largest single mine development in Kazakhstan by both volume and value and will employ around 1,500 people at peak construction activity in the development stage, and slightly over 1,500 people when operational, Kazakhmys said.
The miner said copper in own concentrate in the six months to June 30, 2011 was 152,800 mt, 10% below the level achieved in the same period of 2010.
“The decline reflects the reduction in metal in ore mined. Copper cathode equivalent production from own concentrate in the first half of 2011 decreased by 7% to 153,000 mt, as the lower production of concentrate was partly offset by a release of work in progress carried over from 2010,” Kazakhmys said.
Copper ore output in the first half was 16.5 million mt, a slight rise from the comparable 2010 period, but the average grade of copper in ore was 1.01%, compared to 1.14% in the first six months of 2010.
The combination of higher volume and lower grade led to a 9% decline in metal in ore mined. The decline in grade to around 1% was anticipated. Grades should remain around this level in the medium term, according to the results data.
The miner said copper production was on track to meet the full year target of 300,000 mt, with costs for the full year to remain within the target range of 100-130 cents/lb.