The Asia Miner

SEP-OCT 2014

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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September/October 2014 | ASIA Miner | 35 Central Asia Navoi Mining & Metallurgy Combinat is part of the Uzbekistani state holding company Kyzylkumredmetzoloto and undertakes all uranium mining in the country, as well as gold mining and other activities. Until 1992, all uranium mined and milled in Uzbekistan was shipped to Russia. Since 1992, much of the Uzbekistani uranium production has been exported to the USA and other countries through Nukem Inc. In 2008 South Korea's Kepco signed agreements to purchase 2600 tonnes over six years to 2015, for about US$400 million. In May 2014 China's CGN agreed to buy $800 million of uranium through to 2021, and China customs was reported as saying that Uzbekistan was second only to Ka- zakhstan as a uranium supplier to the country. In 2013, 1663 tonnes was supplied to China. World Nuclear Association director general Agneta Rising Director general Agneta Rising Agneta Rising became director general of the World Nuclear Association on January 1, 2013, having pre- viously held the position of vice president environment at Vattenfall AB. Previously she was director for Nuclear Business Development at Vattenfall Generation. Agneta Rising is co-founder and former president of Women in Nuclear (WIN). During her WIN presi- dency, the organization quadrupled in size. She has also been president of the European Nuclear Soci- ety and president of the Swedish Nuclear Society. Over the past two decades, Agneta Rising has been appointed by the Swedish government, the EU Commission and the International Atomic Ener- gy Agency to several signifcant expert and advisory positions relevant to the safety and future develop- ment of nuclear power. Among these, she served for four years on the IAEA's International Nuclear Safety Group. She was awarded the Atoms for Peace Prize in 2013. KAZAKHMYS has completed the acquisition of Koksay Copper Project in southeast Kazakhstan The project is at scoping stage and has a re- source of about 3.4 million tonnes of copper with an average grade of 0.48% and with by-products of gold, silver and molybdenum. Koksay will be Kazakhmys' third major growth project and the pur- chase price is US$260 million in cash of which $65 million has been deferred. Of the deferred amount, $30 million is payable on January 1, 2015 and $35 million on July 31, 2015. The second instalment is subject to confrmation of reserves. Koksay is around 234km from Almaty and is well located for existing infrastructure. The project has an estimated mine life of more than 20 years with average annual production of around 80,000 tonnes of cop- per cathode equivalent, 60,000 ounces of gold, 400,000 ounces of silver and 1000 tonnes of molybdenum in concentrate. Kazakhmys recently announced that the Government of Kazakhstan had agreed to reduce mineral extraction tax rates at some of the group's mature assets. Lower tax rates have been applied to the deposits in the Zhezkazgan region, excluding the Zhomart mine, and at Konryat mine in the Central region. The assets benefting from the lower rates are all within the two re- gions which have been identifed for potential disposal as part of Ka- zakhmys' proposed restructuring which was announced on February 27, 2014, and followed a review of assets during 2013. These assets have been particularly affected by declining grade and low proftability. The new tax rates are effective retrospectively from January 1, 2014, and are applicable for one year after which a further application can be made. The value of the reduction for a 12-month period, at current metals prices, is about $40 million. In line with the restructuring, the company recently announced that it has entered into a defnitive agreement to transfer certain of its mature assets in the Zhezkazgan and Central regions to Cuprum Holding, a company owned by Vladimir Kim and Eduard Ogay. The parties have also entered into two framework services agreements enabling the continuing group and Cuprum Holding to provide each other with tran- sitional and longer-term services following completion of the defnitive agreement. After completion the continuing group will continue to own the mining and producing assets in the East region and Bozymchak mine in Kyrgyz Republic as well as the three major growth projects, and it is proposed that the company be renamed KAZ Minerals. Kazakhmys chief executive Oleg Novachuk says, "This transaction provides a sustainable future for a set of relatively mature assets which, although of limited economic value to the group, remain important within their local communities, where they are major employers. The transaction will strengthen the fnancial position and move the company towards its strategic goal of production dominated by large-scale, low- cost, open pit mines. Mining operations at one of Kazakhmys projects in Kazakhstan. Kazakhmys acquires Koksay project

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