Kazakh miner ENRC agreed to buy a copper and cobalt processing plant in Zambia for $300 million, dovetailing with last year’s purchase of a miner in neighbouring Congo. ENRC said in a statement on Thursday it hoped to cut costs by using the Chambishi plant in Zambia to process copper and cobalt produced in the Democratic Republic of Congo.
“The acquisition of Chambishi accelerates the group’s expansion in copper and cobalt and at a lower cost than would be required for new investment,” said Mehmet Dalman, independent non-executive director.
ENRC is buying Chambishi and a linked marketing operation based in Dubai from three of its main shareholders, but it got an independent opinion regarding the price, the London-listed group said.
The firm plans to invest $80 million in Chambishi by 2011 to upgrade its facilities, which will boost annual capacity to 55,000 tonnes of copper cathode, more than twice its current level of 25,000 tonnes.
“The integrated copper and cobalt mining and smelting businesses of Chambishi and those in the DRC, when combined, should have an improved cost position over time,” ENRC said
The combined operation is expected to produce 130,000 tonnes of copper cathode a year and 12,000 tonnes of cobalt-contained metal salts and concentrates by 2012.
Last September, ENRC wrapped up a $955 million cash deal to buy junior firm Central African Mining and Exploration, which diversified the firm into metals such as copper and into high-risk areas of Africa. [ID:nL0211900]
ENRC’s main products in Kazakhstan are ferrochrome and iron ore.