Zijin Mining's mine in Tuva on verge of shutdown, regional govt controlling situation - authorities

KYZYL. May 7 (Interfax) - Longxing LLC, a subsidiary of China's Zijin Mining Group that operates the Kyzyl-Tashtyg mine in Tuva, is having financial problems due to sanctions, the regional government's press service said.

"A preliminary decision to suspend work due to financial difficulties caused by the significant expansion of sanctions and subsequent refusals of Chinese banks to work with Russian financial companies will be reconsidered after negotiations with the parent company. Longxing LLC CEO Li Kaiwen flew to China today," the press release said.

The Tuva Economic Development and Industry Ministry reported that Longxing's mine is currently operating.

Economic Development Minister Ayas Bayan was quoted as saying in the press release that the mine employs about 1,200 people, including about 800 local specialists. However, "there is an imbalance in issues of trade relations," the release said.

"In order to resolve the situation, the republic's government formed a special working group with the prosecutor's office. There are currently no incidents related to the operation of the enterprise, the situation is under control," the release said.

Longxing LLC was set up in November 2005 to develop the Kyzyl-Tashtyg polymetallic deposit, the license to which it secured a year later. The company opened a mine and processing plant in 2015 with capacity to process 1 million tonnes of polymetallic ore per year and produce about 220,000 tonnes of copper, zinc and lead concentrates. Investment totalled 17 billion rubles.

Longxing was founded by Heilongjiang Mining Company Zijin Longxing, a division of Zijin Mining, a major Chinese mining group that explores and develops copper, gold, zinc and lithium deposits, and conducts engineering and technological research.