World Economy

Kazakhstan Seeks $3b in Chinese Loans

Kazakhstan Seeks $3b in Chinese LoansKazakhstan Seeks $3b in Chinese Loans

Kazakhstan is seeking loans from China worth around $3 billion to build two new plants to boost copper and aluminum output in the Central Asian nation, Kazakh Deputy Investment and Development Minister Albert Rau told Reuters in an interview.

London-listed Kazakh company KAZ Minerals, among the world’s major copper producers, announced in March it would team up with China’s Baiyin Nonferrous Metal Group to build a new smelter.

The joint venture plans to produce 300,000 tons of cathode copper a year, and the plant is estimated to cost $1 billion, Rau said. Kazakhstan’s copper production totaled 294,000 tons last year.

ENRC Group, which delisted from the London Stock Exchange in 2013, is looking for a separate loan of around $2 billion to double its current aluminum output of 250,000 tons, he said.

“As a rule, the source of financing is China Exim Bank via (the state-run) Kazakhstan Development Bank,” Rau said.

He said KAZ Minerals and its Chinese partner were expected to complete forming their joint venture by the end of the first half of this year. “The construction of the plant will take a minimum of three years,” he added.

“Building this new copper plant in Kazakhstan to process ore from the Aktogay and Bozshakol deposits is a priority project (with China),” Rau said.

KAZ Minerals has set its sights on the giant market of neighboring China. “We ... did our best to prove to them (the Chinese) that it would be more advantageous for them to receive cathode copper rather than copper concentrate,” Rau said.

The main shareholder of Baiyin Nonferrous Metal Group is state-owned investment company CITIC Group.

ENRC, a large producer of ferroalloys which also produces iron ore, alumina and aluminum, plans to double its output of aluminum by launching two new production stages, each with a capacity of 125,000 tons of the metal, Rau said.

As part of this project, Kazakhstan wants to boost its processing of primary aluminum into manufactured articles.

“We are first and foremost interested in producing car discs and, in general, in whatever aluminum can be bashed into. Each side of the project (aluminum production and processing) is worth $1 billion.”

“Today we produce 250,000 tons of aluminum, but process just 30,000 to 40,000 tons,” he said. He gave no further detail.