Chinese Copper Companies to Sign Deal with Afghanistan

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Researched by Industrial Info Resources (Sugar Land, Texas)--Chinese copper companies are expected to sign an agreement with Afghanistan before China's Spring Festival (February 6, 2008) to exploit the Aynak copper mine. Jiangxi Copper Corporation (Guixi City, Jiangxi Province) and China Metallurgical Group Corporation (Beijing) got priority last November to sign the agreement by bidding $808 million, higher than that of Russia's Basic Element Group, England's Kazakhmys Consortium, Canada's Hunter Dickinson and the U.S.'s Phelps Dodge.

The Aynak copper mine is about 30 kilometers east of Kabul, Afghanistan's capital. The mine was founded in the 1970s with a proven deposit of up to 11.3 million tons. It is regarded as one of world's biggest copper mines. A survey by Soviet experts in 1978 found that the grade of the mine was 1.56% and that the total amount of copper ore was 705 million tons.

An article from the China Metallurgical Group's website states that the two groups will invest $3.7 billion in the project and that the mine will produce 220,000 tons per year of electrolytic copper. According to the 30-year lease, Jiangxi Copper and China Metallurgical will establish a company to manage the business in which Jiangxi Copper will invest at least 20%. Jiangxi Copper will also buy 50% to 70% at international prices of the copper concentrate after the mine goes into operation.

According to the bidding plan, the companies will start basic construction on the mine in six to 12 months and spend five years to finish. After civil engineering is finished, the joint venture will pay $400 million every year to Afghanistan's government to operate the business.

Shortly after winning the bid, Cha Kebing, Deputy Engineer in Chief of Jiangxi Copper, said the company is willing to adopt advanced techniques to protect local environment. The company will collect rare metals, sulfur dioxide and wasted heat to bring in more benefits and to reduce the impact on the environment.

Jiangxi Copper Corporation, founded in 1979, covers copper mining, milling, smelting and processing. It is the largest copper production base and a major producer of sulfur, gold and silver in China. It is also one of China's main state-supported enterprises. The company has formed the largest domestic production capacity for copper smelting. With the completion of a 300,000-ton copper-smelting project in July, 2007, the company achieved a smelting output of more than 800,000 tons.

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