Engineering & Mining Journal

SEP 2018

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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Page 25 of 75

REGIONAL NEWS - ASIA 24 E&MJ • SEPTEMBER 2018 HCL to Expand Copper Production India's sole integrated copper producer, state-run, Hindustan Copper Ltd. (HCL) will increase its production six fold to 20 million metric tons per year (mt/y) invest- ing an estimated $808 million over the next six years to expand its copper mines. According to a company official, HCL, which currently meets about 4% of domestic demand of copper, will in- crease domestic supplies to meet about 30% of domestic demand of the non- ferrous metal on completion of its expan- sion projects. The entire funding for the expansion would be raised through fresh issue of eq- uity shares to Qualified Institutional Place- ments (QIPs), and following the placement of the instrument, the Indian government's equity holding in HCL will be reduced to 66.13% from 76.05% at present. The expansion plans of HCL comes close on the heels of the closure of Ve- danta's Sterlite Copper plant at Tuticorin in southern state of Tamil Nadu following incidents of pollution and local protests. Although details have not yet been officially unveiled, it was learned that the company will revive its mothballed Khetri Copper Plant in central desert state of Rajasthan. The revival of the Khetri smelter and acid producing facility would enable HCL to add about 31,000 mt/y of refined cop- per to its annual production capacity. The Khetri copper plant was expected to reach a capacity utilization of 120% over a period of time and increase domestic copper production against the anticipated backdrop of domestic shortage, which was the highest priority of the company. KAZ Minerals Acquires Copper Project in Russia's Far East KAZ Minerals has agreed to acquire the Baimskaya copper project in the Chukot- ka region of Russia's Far East for $900 million in cash and shares, comprising initial consideration of $675 million and deferred consideration of $225 million. Baimskaya is a significant undeveloped asset, with potential to become a large- scale, low-cost, open-pit copper mine. Av- erage annual production over the first 10 years of operation is forecast at 250,000 metric tons (mt) of copper and 400,000 ounces (oz) of gold. Mine life is forecast at approximately 25 years. The Baimskaya project has current JORC-compliant resources of 9.5 million mt of copper at an average grade of 0.43% copper and 16.5 million oz of gold at an average grade of 0.23 g/mt gold. The proj- ect has a license area of 1,300 km 2 that offers potential for resource expansion. Capital expenditures to develop Baim- skaya are estimated at $5.5 billion, subject to a feasibility study that is scheduled for completion by the end of 2019. Detailed engineering, procurement, and construction are currently planned to take place from 2020 through 2026, followed by ramp up to full production by the end of 2027. Baimskaya is located in a region identi- fied by the Russian government as strategi- cally important for economic development and is expected to benefit from state infra- structure development and tax incentives. A prefeasibility study of the project as- sumed 60 million mt/y of ore processing capacity through two concentrators. KAZ Minerals Chair Oleg Nova- chuk commented, "The acquisition of Baimskaya marks the next stage of the transformation of KAZ Minerals. The de- velopment of this new project in Russia will enable the Group to continue its in- dustry leading growth, delivering both value and volume as the copper market is forecast to enter a period of significant supply deficit. Through our successful execution of the Bozshakol and Aktogay projects in Kazakhstan, we have built a track record for project execution that makes KAZ Minerals the ideal platform to develop this globally significant asset." Gold Output From CNMC's Sokor Increases A marked increase in gold output after its third processing plant began full commer- cial production in May this year enabled CNMC Goldmine Holdings Ltd. to gener- ate core earnings of $1.80 million in the second quarter of 2018, reversing a net loss of $35,052 in the same period last year, the company said. The group produced and sold 7,187 oz of fine gold at its flagship Sokor project in Malaysia's Kelantan state in the second quarter, the highest since the third quar- ter of 2016 and 87.4% more than in the second quarter of 2017. CNMC's carbon-in-leach (CIL) plant, designed for extracting higher-grade ore, was a key driver of its second-quarter 2018 output, which included contributions from its heap leach and vat leach plants. The CIL plant boasts a gold recovery rate of up to 95%, compared to about 60% for heap leaching and 80% for vat leaching. "With the CIL plant fully operation- al and augmenting production from the heap leach and vat leach facilities, we are hopeful that overall gold output this year will exceed what we achieved in 2017," said Chris Lim, CEO, CNMC. The group's all-in cost of production de- creased to $1,038/oz of gold in the second quarter of 2018 from $1,115/oz a year ear- lier, due mainly to economies of scale stem- ming from the increase in gold production. Over time, copper production from Baimskaya could offset declining production from other KAZ operations.

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