LONDON, Aug 2 (Reuters) - Kaz Minerals, a low-cost copper producer until now focused on Kazakhstan, said it has agreed to buy the Baimskaya copper project in the Chukotka region of Russia for $900 million in cash and shares.
The deal is comprised of an initial $675 million and a deferred payment of $225 million.
Kaz Minerals Chairman Oleg Novachuk said the acquisition of Baimskaya marked “the next stage of the transformation of Kaz”.
“The development of this new project in Russia will enable the group to continue its industry leading growth, delivering both value and volume as the copper market is forecast to enter a period of significant supply deficit,” he said in a statement.
Kaz Minerals said Baimskaya was one of the world’s most significant undeveloped copper assets with the potential to become a large scale, low cost, open pit copper mine.
It holds 9.5 million tonnes of copper and 16.5 million ounces of gold and is expected to yield average annual production over the first 10 years of operations of 250,000 of copper and 400,000 tonnes of gold, with a mine life of approximately 25 years. (Reporting by Barbara Lewis; Editing by Susan Fenton)