China to Fund Kazakhmys

The patience paid the London-listed copper producer, Kazakhmys after it has secured up the $2.7bn loan from the China Development Bank Corporation and Samruk-Kazyna to develop growth projects.

Kazakhmys will use $100m of the loan to develop the Bozymchak gold and copper project in Kyrgyzstan, with the remaining $600m allocated to other projects.

"We are delighted to have reached an agreement with Samruk and the CDB that gives us flexible, long dated financing to deliver our major growth projects,” said Chairman Oleg Novachuk.

For China, the greatest consumer of copper, the deal serves as the latest in a series in Kazakhstan. This year, it has made a total of $13bn of investments in the oil-rich former Soviet republic, Reuters reported.

Analysts augur that in order to have sufficient funding for the deal; the producer would require selling an equity stake in the project in order to have sufficient funding for it.

The development project at Boschekul has been delayed amidst doubts over financing along with another project at Aktogay. Last year, Kazakhmys revised the plan in reference to a plunge in metal prices and claimed that it would be working on both the plans as they need less investment in the near term.

Boschekul is expected to be full function in other four or five years and could produce about 100,000 tonnes of copper yearly which forms a third of the group’s existing total.