The Asia Miner

JAN-FEB 2018

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

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Volume 15 • Issue 1 | 2018 | ASIA Miner | 71 Central Asia KAZ Minerals has received approval for a US$1.2 billion expansion program at Aktogay Copper Project in Kazakhstan. This will double annual sulphide ore processing capacity to 50 million tonnes from 2021 through construction of a second concentrator. This comes on the back of the project achieving commercial production at the first sulphide concentrator in October 2017 and will include an upgrade of the mining fleet to support higher ore throughput. The expansion represents a low-risk growth project as it dupli- cates the sulphide processing facilities KAZ has commissioned at the Bozshakol and Aktogay projects. Output from the new concentrator is expected to begin in the sec- ond half of 2021 with the facility ramping up during 2022. Construction will be managed by KAZ Minerals Projects Division that delivered the original project, with contracts to be tendered in 2018. The capital budget for the expansion is expected to be in the re- gion of $1.2 billion with approximately $200 million to be invested in 2018. Remaining expenditure will be incurred from 2019 to 2021. Annual production from sulphide ore at Aktogay will increase by 80,000 tonnes to an average of around 170,000 from 2022 to 2027, supported by higher copper grades. Over the remaining life of the mine, when copper grades will be in line with the average resource grade of 0.34%, the expansion will add 60,000 tonnes annually, increasing production to around 130,000 tonnes. Due to higher processing volumes the life of the sulphide ore body will reduce from more than 50 years to about 28 years. Copper cathode production from oxide ore will be unchanged at the annual level of around 20,000 tonnes for the remaining eight year life of the oxide deposit. KAZ started construction work on the Aktogay project in the first half of 2013 and commissioning of the first sulphide concentrator began in December 2016. Copper concentrate production from sulphide ore commenced in February 2017. The plant has annual ore processing capacity of 25 million tonnes. KAZ Minerals operates six producing mines. The three mines in East Region are underground while the Bozshakol, Aktogay and Bozymchak mines are open pit. Bozymchak is in the Kyrgyz Re- public. LEADING Russian mining and metals company Mechel PAO has signed a protocol of intent aiming to develop ties between Mech- el-Steel Management Company OOO and Kyrgyz Republic national company Kyrgyz Temir Zholu. The two parties intend to build sys- tematic cooperation, including exchanging product information. They will also seek cooperation in steel rolls supply, including those of broad-gauge rails. The protocol was signed in Bishkek on the sidelines of the Sixth Russian-Kyrgyz Inter-Region Conference for a term of five years, in the presence of the co-chairmen of the Inter-government Rus- sian-Kyrgyz Commission on Trade, Economic, Science, Technical and Humanitarian Cooperation, Russia's Deputy Prime Minister Arkady Dvorkovich and Kyrgyz Republic's Deputy Prime Minister Tolkunbek Abdygulov. "We are interested in developing partner ties and expanding the market for our rails. We sincerely hope that signing this protocol of intent will start a long-term and mutually beneficial cooperation with Kyrgyz Temir Zholu," said Mechel-Steel Management Company OOO's chief executive officer Andrey Ponomarev. Mechel's products are marketed in Europe, Asia, North and South America, Africa. The company unites producers of coal, iron ore concentrate, steel, rolled products, ferroalloys, heat and electric power. It has also secured recent agreements in Japan and China. In November, Mechel signed a framework agreement with ma- jor Japanese universal trading company Itochu Corporation. The agreement stipulates that Mechel is due to supply Itochu with up to 300,000 tonnes of washed steam coal produced at Southern Kuzbass Coal Company's New-Olzherasskaya Mine. Japan's market accounts for about 20% of Mechel's coal exports and the company expects to increase this figure in the near future. In December, Mechel reported that it has signed a long-term coal supply contract with China's Jidong Cement, one of the world's top cement producers. Mechel will supply its Chinese partners up to 3 million tonnes of steam coal mined at Elgaugol OOO's Elga Open Pit and Yakutugol Holding Company AO's Neryungrinsky Open Pit. Jidong Cement is the chief foreign consumer of Elga's steam coal. Mechel signs Kyrgyz steel agreement Aktogay copper processing to double Loading ore at KAZ Minerals' Aktogay project in the East Region of Kazakh- stan.

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