Kazakhmys forms mine JV with China's Jinchuan

Kazakh copper miner Kazakhmys has agreed a joint venture for one of its major projects with China's Jinchuan Group Ltd, to share the high costs with a company located in the world's biggest copper-consuming nation.

Kazakhmys, the world's eighth-largest copper producer, said on Monday it would sell a 49 per cent stake in its Aktogay project in the east of Kazakhstan to Jinchuan for $120m.

The two firms will share development costs, estimated at $1.5bn to $2.0bn, of Aktogay, due to produce 100,000 tonnes of copper in concentrate per year.

That would boost current output by around a third.

"Kazakhstan's extensive infrastructure and proximity to the Chinese market has been central in taking these projects forward," said Chief Executive Oleg Novachuk.

The project, seen as a large open pit mine, is located in the Ayoguz region of Kazakhstan.

Kazakhmys bills Aktogay as one of the leading undeveloped copper deposits in the world, with contained copper of nearly 5 million tonnes to support a mine life of 40 years.

A feasibility study is due to take about a year, after which mine construction will last three additional years, it added.

Jinchuan produces a range of non-ferrous metals, but its biggest products are nickel and platinum group metals, accounting for more than 90 per cent of China's total output of those products.

Kazakhmys said last month it expected lower tax rates this year after high taxes and sliding metal prices led to it missing 2009 profit forecasts with a halving of consolidated earnings per share.

The firm also said it was in good shape to pursue its expansion projects after slashing net debt to $689m from $1.63bn a year earlier.