Kazakhstan on the Verge of a Copper Junior Boom
Ural Construction Union is about to launch a copper ore mining project in Kazakhstan. This is another boom in the creation of small companies in Kazakhstan to develop smaller deposits of the red metal. And this is not the first in the non-ferrous metallurgy of Russia's neighbour.
Western players
The pioneer of Kazakhstan's small-scale non-ferrous metallurgy is the British company Central Asia Metals, which began producing copper cathodes at its hydrometallurgical plant in April 2012. In May, 504 tonnes were sold under a spot contract to Traxys Europe (a subsidiary of the international trader Traxys). At the end of 2012, Central Metals Asia planned to produce 5.75 thousand tonnes of copper at the plant, while in 2013 the target production level of 10 thousand tonnes was to be reached.
It is worth noting that the Central Metals Asia project was aimed at developing artificial deposits. How was this possible? Elementary. Between 1936 and 2005, the Kounrad mine stockpiled host rock and unbalanced ores. The technologies available at the time did not allow them to be exploited. The waste dumps were exposed to natural leaching by precipitation, and the chemical compounds leached from them were released into the surrounding environment, degrading it.
Over the years, much has changed in the mining sector and hydrometallurgy has become widespread throughout the world. The conventional process is as follows: heap leaching - liquid extraction - electrolysis.
That is why Central Metals Asia set out to apply it. In September 2007, the Kazakh state company Saryarka and Central Metals Asia signed an agreement to jointly implement a project to exploit the technogenic mineral formations of the Kounrad mine. Saryarka entered into the agreement with the right to explore and mine, while Central Metals Asia undertook to provide the necessary financing and to build and manage the company. The project was implemented quite successfully, and in 2013 Central Metals Asia produced 10.5 thousand tonnes of copper, and in 2022 - over 14.2 thousand tonnes.
By the way, the amount of accumulated waste is a very impressive 627.6 million tonnes. Based on the average copper content of 0.12%, it is easy to calculate how much is in the landfills - about 737 thousand tonnes. In other words, they can be processed over a fairly long period of time. Of course, hydrometallurgy is not omnipotent, but it is possible to extract a significant amount of copper from the waste.
It should be noted that Central Metals Asia is not the only company in Kazakhstan. In August, a similar plant owned by Frontier Mining produced its first cathodes. Unlike Central Metals Asia, Frontier Mining has chosen to exploit a natural deposit, Benkala, rather than an artificial one. It has a resource of 1.56 million tonnes of copper, plus molybdenum and gold. The hydrometallurgical plant built had a capacity of 7,000 tonnes of copper per year, although this was to be expanded to 10,000 tonnes in 2013.
Previously, Frontier Mining expanded its resource base by acquiring the South Benkala deposit from PromSnab2030 for $2.5m through its subsidiary KazCopper in January 2012. It is located close to Benkala and has the potential to increase copper reserves. Frontier Mining was considering two options for its future: either to incorporate the deposit into an existing project, extending the life of the plant, or to develop it separately, supplying ore to the plant and increasing production.
Orsu Metals was breathing down the necks of Central Metals Asia and Frontier Mining, which were building a hydrometallurgical plant on the Karchiga deposit. Soviet geologists had found decent concentrations of the red metal, allowing them to calculate Karchiga's reserves in the late 1950s - 5.11 million tonnes of ore with a copper grade of 2.77%. Construction of the plant was due to start in 2012 and commissioning was planned for autumn/winter 2013. The production of copper cathodes was to be relatively small - 2.8 thousand tonnes per year.
But something went wrong - in November 2015 it was reported that Orsu Metals intended to sell Karchiga due to significant losses, and in February 2017 it was bought by Karasat Trading. Failure also hit Frontier Mining, which literally disappeared - its website has long since been taken down.
A new dawn
The renaissance of Kazakhstan's small-scale non-ferrous metallurgy began in November 2022, when Irkaz Metal opened a hydrometallurgical plant at the Borly deposit. The deposit was discovered in 1931 and geological exploration was carried out intermittently between 1931 and 1982. It has reserves of 115 million tonnes of ore with an average copper grade of 0.35%. Borly also contains molybdenum at a concentration of 0.11%.
Such grades were considered low during the Soviet era, and so Borly was only considered as a reserve deposit for the Kounrad mine. For many years it was offered to various investors. To this day, an advertisement from eight years ago can be found on the Internet, stating that an investment of around $20 million in the development of Borly would make it possible to produce 3,000 tonnes of copper a year for 17 years.
A deposit as modest as Borly has gained interest thanks to the boom in renewable energy, which requires five times more copper than conventional sources. The development of electric cars has also helped - each one requires 80 to 120 kg of copper, compared with 8 to 15 kg for cars with internal combustion engines.
Two Iranian players - Chadormalu Mining & Industrial and Golgohar Mining & Industrial - have shown interest in Borly and have formed a joint venture, Irkaz Metal, which has built a hydrometallurgical plant with a capacity of 5,000 tonnes of copper cathodes per year. Within 12 years it will process oxidised ores using a 'heap leach-liquid extraction-electrolysis' process.
Irkaz Metal's plans include the mining of sulphide ores that lie beneath the oxide ores. Work on the Borly concentrator is expected to start this year and is scheduled for completion in 2026. It will process the sulphide ores into copper concentrate and supply it to the public.
A similar project is currently being implemented by Shagala-Mining, which intends to exploit the deposit of the same name. The size of its reserves could not be determined, but there is information about the average copper concentration - 0.35-0.43%. By the end of 2023, Shagala-Mining plans to commission a hydrometallurgical plant capable of producing up to 10,000 tonnes of copper per year.
Curiously, it is not known who exactly is behind Shagala-Mining. Meanwhile, the Ural Construction Union is going to mine copper ore in Kazakhstan, and there are reasons to believe that it is linked to Shagala-Mining.
Ural Construction Union (according to its website) is registered in Russia and specialises in overburden reclamation. It plans to invest $66.8 million in copper ore mining in Kazakhstan, an amount close to Shagala-Mining's investment. Their projects are located in the same region of Kazakhstan.
In principle, the projects of Irkaz Metal, Shagala-Mining and Ural Construction Union could be much more successful than those of Orsu Metals and Frontier Mining: in 2023, the world market can reasonably expect a copper deficit of 114-150 thousand tonnes, and in 2028-2030 it could grow to 3-5 million tonnes. This will drive up prices - by 2030 they may well reach the level of $10-15 per tonne, making it profitable to develop deposits with minimal grades and reserves of the red metal.
In addition to companies from Iran and Russia, Kazakhstan is attracting companies from China, which prefer larger projects. No wonder China Nonferrous Mining Corporation (CNMC), together with KAZ Minerals and Kazakhmys, is exploring ways to build a copper smelter. The smelter's capacity is estimated at 300,000 tonnes per annum, and concentrates will of course be sourced from KAZ Minerals and Kazakhmys mines. CNMC mines copper in Zambia and Kazakhstan is important for its strategic growth. The timing of construction of the future plant has not been determined, but it could be just in time for the global market.
