PRODUCTION of the first saleable copper concentrate from sulphide ore at KAZ Minerals’ Aktogay project in Kazakhstan is expected by the end of the March quarter of 2017. The AIM-listed company is also ramping up production at Bozshakol after commissioning of the clay plant.
|Copper cathode produced at KAZ Minerals’ Aktogay project in Kazakhstan.|
KAZ says that the Aktogay project budget has been reviewed and reduced by $100 million to $2.1 billion. The saving has been achieved through faster than anticipated progress in construction of the concentrator, a partial release of contingency and from the continued benefit of a local supplier strategy and sustained weak tenge.
The capital expenditure profile for the project is expected to be approximately $100 million in the second half of 2016, $240 million in 2017 and $370 million in 2018. The 2018 figure includes $300 million of payments relating to work in 2016 and 2017 that was deferred under an agreement with the principal construction contractor in November 2015.
In early December the company’s chief executive Oleg Novachuk said, “We are happy to announce the start of commissioning activities at the Aktogay sulphide concentrator and a further reduction of $100 million in the project budget. We are now focused on ramping up production at Aktogay and Bozshakol to deliver industry-leading copper production growth.”
KAZ later reached agreement on a new $300 million credit facility with the Development Bank of Kazakhstan JSC (DBK), which will finance completion of the Aktogay project. The company has also announced that an increased commitment by ING Bank NV in the pre-export finance facility (PXF) has been agreed for an additional $50 million.
Chief financial officer Andrew Southam said, “We are pleased to have secured a new, long-term facility of $300 million from DBK and to have increased ING Bank NV’s participation in the PXF facility by $50 million, ahead of a planned refinancing in the first half of 2017. These transactions demonstrate the group’s ability to access diversified sources of finance and the strong support it enjoys from its lenders.”
Commercial production at the new 25 million tonnes/annum Bozshakol sulphide concentrator was declared in the December quarter after consistent increases in throughput. When output from the new clay plant with annual capacity of 5 million tonnes is added, total ore processing capacity is 30 million tonnes.