The KAZ Minerals’ Baimskaya copper project could be delayed by one year due to the CDP proposed for the Chukotka region of Russia
Kazakhstan-focused copper company KAZ Minerals is planning to delay the development of the proposed Baimskaya copper project in Chukotka, Russia due to the new infrastructure plans for the region.
The latest move comes as multi-party Complex Development Plan (CDP) for new infrastructure in the Chukotka region has been submitted by the Ministry for the Development of the Russian Far East and Arctic for approval by the Prime Minister of the Russian Federation.
The CDP includes infrastructure that would be used by KAZ Minerals for the Baimskaya open-pit copper mine.
As a result, KAZ Minerals will be responsible for a portion of the infrastructure capital costs, which is expected to increase the estimated capital construction cost of the project to close to $8bn.
To order to accommodate with the new infrastructure plan, the project is planned to be delayed by one year while the bankable feasibility study (BFS) will be delayed and be completed in the first half of 2021.
The Baimskaya project, which is expected to have an annual ore processing capacity of 70 million tonnes per annum (Mtpa), is now scheduled to start production by the end of 2027.
Additionally, the project’s BFS is being prepared with a 20-year mine life based on JORC measured and indicated resources.
Last month, Nova Resources has agreed to acquire KAZ Minerals in a deal worth £3bn.
KAZ Minerals independent committee chair and senior independent director Michael Lynch-Bell said: “When recommending the offer from Nova Resources of 640p per share, the Independent Committee of KAZ Minerals stated that the risks on the Baimskaya project were increasing.
“The Complex Development Plan for Chukotka submitted today within the Russian government has resulted in higher infrastructure costs and a delay to the bankable feasibility study.”