China Trade Information

Jiangxi Copper Co Ltd, China’s second-largest copper producer, has announced an agreement with state-owned construction company China Metallurgical Group Corp (CMGC) to jointly set up a mining company in Afghanistan.

Development of Afghanistan’s Aynak copper mine would involve a total investment of US$4.39 billion, of which Jiangxi Copper and China Metallurgical will contribute 30% and the rest will be “project financing”, market sources reported. Jiangxi Copper will pay about US$330 million for a 25% stake in the venture.

Aynak is Afghanistan’s biggest copper mine. The Jiangxi venture will pay US$808 million to the Afghan government for mining rights, the company said in a statement last month.

The venture is expected to attract other investors and Jiangxi Copper and CMGC are likely to be able to sell shares to other potential investors.

Jianxi has a copper refining capacity of 550,000 tons, expected to be raised to 700,000 tons a year in 2008. The Afghan mines have deposits of an estimated 700 million tons of copper ore and are expected to supply ore for about 100,000 tons of refined copper a year in the first ten years.

Tags: Copper

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