Baku, Azerbaijan, Feb. 26
By Elena Kosolapova - Trend: Kazakhstan's Metallurgical Corporation KAZ Minerals plans to start commissioning of its first major growth project at Bozshakol copper mine in Kazakhstan in the fourth quarter of 2015, the company reported Feb. 26.
"We began training production personnel, as planned, in December 2014 in advance of pre-production mining commencing in the first half of 2015. The final phase of construction and equipment installation works can now be accelerated as we emerge from the winter period," the company said.
KAZ Minerals expects limited production from Bozshakol in the fourth quarter with ramp-up occurring in 2016. In 2015, the company will invest the remaining $0.9 billion of the $2.2 billion capital expenditure budget for the project.
Capital expenditure in 2014 was $0.5 billion, taking a total $1.3 billion capital expenditure on the project as of December 31, 2014.
The company's second copper project, Aktogay, is also in the construction phase and works are proceeding on schedule. Production from the oxide ore at Aktogay is expected in the fourth quarter of 2015 and output from the main sulphide ore body will begin in 2017, Kazakh KAZ said.
Capital expenditure for the Aktogay project is expected to be $0.5 billion -$0.7 billion in 2015. Capital expenditure in 2014 amounted to $0.4 billion, taking total spend on the project as of December 31, 2014 to $0.9 billion.
The company noted that in 2014 it acquired Koksay copper project in Kazakhstan for a total consideration of $260 million, of which $35 million is deferred to 2015, dependent on drilling results.
In 2014, the company undertook a confirmatory drilling program to gather more information on the ore body. Further drilling and studies will be performed in 2015. Capital expenditure at Koksay in 2014 was $4 million and in 2015 is not expected to exceed $15 million.
"Koksay has the potential to be another large scale, low cost, open-pit copper mine in Kazakhstan, similar to the Bozshakol and Aktogay projects, providing additional growth in the long-term," the company said.
The project is estimated to have a production life of over 20 years with average annual production of around 80,000 metric tons of copper cathode equivalent along with gold, silver and molybdenum by-products. The deposit has a measured and indicated mineral resource of 701million metric tons as of December 31, 2014 with a copper grade of 0.44 percent.
The project is forecast to require capital expenditure of up to $15 million in 2015 to complete initial exploration works and commence basic mine and concentrator design works. Final deferred consideration for the purchase of the license of $35 million is also payable on July 31, 2015, subject to the confirmation of reserves. The timing of future capital expenditure on the project will be assessed based on the financial position of the Group.
By 2018, KAZ Minerals expects to be producing around 300,000 metric tons of copper in concentrate, with 80 percent of group production coming from new, large scale, low cost, open-pit mines.
KAZ Minerals PLC is a high growth copper company focused on large scale, low cost, open-pit mining in Kazakhstan. It is a leading copper producer in Kazakhstan with five operating mines and four concentrators. In 2014, total copper cathode output from continuing operations was 84,000 metric tons. The group's continuing operations also produced 121,000 metric tons of zinc in concentrate, 3.435 million ounces of silver and 35,000 ounces of gold in 2014.
The Group has two major copper projects under construction, Bozshakol and Aktogay, and a third, Koksay, at scoping stage. These projects are expected to deliver one of the highest growth rates in the industry and transform KAZ Minerals into a company dominated by world class open-pit copper mines.
KAZ Minerals PLC is listed on the London Stock Exchange, the Kazakhstan Stock Exchange and the Hong Kong Stock Exchange and employs around 10,000 people, principally in Kazakhstan.
Edited by CN
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