Jiangxi Copper, the mainland's largest integrated copper producer, teamed up with state-owned China Metallurgical Group Corp (CMCC) to invest US$4.39 billion to develop a project at the Aynak mine in Afghanistan, the company said.
According to the underlying agreement, Jiangxi Copper and CMCC will form a venture to take over the overall operations, in which Jiangxi Copper will hold a 25 per cent stake with the rest being held by CMCC. Jiangxi Copper will contribute HK$2.5 billion in cash while CMCC will commit HK$7.68 billion, and the remainder will be backed by project financings.
Jiangxi Copper said the venture would seek financing through self-arranged bank facilities.
After the formation of the venture, the two parties could start to find individual investors by reducing their stakes to not more than 5 per cent.
Jiangxi Copper said earlier last month that it agreed to pay Afghanistan's Ministry of Mines a sum of US$808 million in phases for the rights to explore and exploit minerals in the central and western mineralised zones in Aynak Copper Mine for 30 years.
The Aynak mine, one of the world's largest copper mines, is expected to produce 220,000 tonnes of refined copper and 100,000 tonnes of copper concentrates for the first 10 years after the commencement of operation.