Kazakhmys announces development of the major copper project at Aktogay
Friday, Dec 07, 2012Kazakhmys PLC (“Kazakhmys” or the “Group”) announces that the Board has approved the development of Aktogay, its second major copper project, following the successful completion of the feasibility study.
Total Measured and Indicated mineral Resource (JORC) of 1,719 million tonnes at an average copper grade of 0.33%
Development to start in early 2013, and first production from oxide ore body in 2015 and sulphide ore body in 2016
Mine life of over 50 years, with average production of 104 kt copper cathode equivalent in first 10 years
Competitive operating cost, in the second global quartile
Capital cost of around $2 billion, primarily funded through a $1.5 billion facility from China Development Bank
Significant benefit of existing infrastructure including power and transport links
Aktogay is a large open-cast mine in south eastern Kazakhstan, approximately 250 km from the Kazakhstan-China border. It is the Group’s second major copper project alongside Bozshakol, which was approved in August 2011 and is already in development.
The project has the advantage of existing infrastructure, including power and transportation links. Aktogay has significant similarities to Bozshakol, and the intention is to enhance value by replicating existing design and engineering work at Bozshakol.
The Aktogay ore body consists of an oxide deposit on top of a larger sulphide deposit, the latter containing some valuable molybdenum which will be extracted as a by-product. The deposit has a Mineral Resource of 1,719 million tonnes, at an average copper grade of 0.33%.
Development of Aktogay will start in early 2013. First production from the oxide deposit will be in 2015. Development of the sulphide plant will be completed in early 2016 with the first ore being processed at the concentrator that year. Average annual output will be 72 kt of copper cathode equivalent during a mine life of over 50 years, although production will average 104 kt for the first 10 years. The project has a capital cost of around $2 billion, and is primarily being funded from a $1.5 billion project specific financing facility signed with the China Development Bank in December 2011.
At current prices, Aktogay has a competitive operating cost, in the second quartile for copper mines globally.
Aktogay and Bozshakol are the largest mine developments in Kazakhstan by both volume and value. Aktogay will employ just over 3,000 people at peak construction activity, and slightly over 1,500 people when operational. Together, the two projects represent investment of around $4 billion in Kazakhstan.
Oleg Novachuk, Chief Executive Officer of Kazakhmys said: “I am delighted to announce the approval of Aktogay, which allows us to move forward with our second major copper project. The combination of our Bozshakol and Aktogay projects will add around 200 kt of low cost production from new generation open pit mines, which will be transformational for Kazakhmys and also for the mining industry in Kazakhstan. The combined projects represent an investment of around $4 billion creating significant employment and ensuring the continued growth of the copper industry in the country. We are grateful for the continued support of the China Development Bank in providing the financing for the project. I should also like to thank my colleagues for their work in bringing Aktogay to development and I look forward to updating you as the project progresses.”