Jiangxi Copper, Metallurgical Group Invest $4.4B In Afghan Mine

SHANGHAI, Jun 29, 2008 (Dow Jones Commodities News via Comtex) -- Jiangxi Copper Co. (0358.HK) and China Metallurgical Group Corp. will invest US$4.39 billion in developing a large copper project in the Aynak field in Afghanistan, Jiangxi Copper said Monday.

Jiangxi Copper, China's largest integrated copper producer by output, will own a 25% stake in the project, while Metallurgical Group, a state-owned metal producer and contractor, will hold the remainder, Jiangxi Copper said in a statement.

The two companies will pay $1.32 billion, or 30% of the total investment in cash, and use bank loans to finance the rest, the statement said.

Jiangxi Copper and Metallurgical Group said last month they signed an agreement with the Government of Afghanistan for 30-year mining rights in the Aynak field.

The Aynak mine has estimated copper reserves of 11 million metric tons, the Chinese companies said at the time.

Jiangxi Copper said Monday the Aynak mine will produce 220,000 tons of refined copper and 100,000 tons of copper concentrates in total during the first 10 years of the mine's operation.

The annual capacity of the mine will rise to 220,000 tons of refined copper from the 11th year, Jiangxi Copper said.

"The investment will increase the company's copper metal production, and ensure sufficient and stable material supplies for the company," Jiangxi Copper added.

The deal is subject to the approval of Chinese and Afghan regulators.

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