20 Dec 2022 09:23

KAZ Minerals secures Russian permission to restructure ownership of Baimskaya copper project

MOSCOW. Dec 20 (Interfax) - Trianon Limited has secured the Russian president's permission to carry out transactions with stakes in GDK Baimskaya, a division of KAZ Minerals.

The relevant order was signed by President Vladimir Putin on December 19 and posted on the official website for legislation.

The transfer of Baimskaya to Kazakhstan-based Trianon Ltd is an intra-group transaction within KAZ Minerals, a source familiar with preparations for the transaction told Interfax.

Baimskaya's ownership needed to be changed to exclude entities from "unfriendly" jurisdictions from the chain of ownership. GDK Baimskaya is now owned by Cyprus-based KAZ Minerals Baimskaya Holdings Limited. After the restructuring, the company will be wholly controlled by Trianon Ltd.

The intra-group transaction needed permission from the Russian president because GDK Baimskaya falls under the requirements of presidential decree No. 520 of August 5, 2022, "On special economic measures in the finance and fuel and energy sectors in connection with the unfriendly actions of certain foreign states and international organizations." The decree directly bans non-residents from countries unfriendly to Russia from exiting certain assets without the president's special permission.

The decree applies to strategic companies, energy companies, banks with foreign owners, equipment servicing and production in the fuel and energy sector, and users of subsurface resource deposits (including under production sharing agreements), including gold, nickel, diamonds, and platinum group metals, among others.

The mine and processing plant at the Baimskaya copper and molybdenum deposit in eastern Russia, with annual capacity of 70 million tonnes of ore, was expected to go into operation by the end of 2027.

However, the project might be pushed back by a year judging by KAZ Minerals' decision to postpone the launch of the modernized floating nuclear generating units that will provide power to the mine and plant, Interfax sources said in November. KAZ Minerals is considering postponing investment, one of the sources said.

Overall private investment in the project is expected to exceed 620 billion rubles. More than 78 billion rubles had been invested as of November 2022.

The Baimskaya deposit has estimated resources of 9.5 million tonnes of copper, about 500 tonnes of gold, up to 3,000 tonnes of silver and 132,000 tonnes of molybdenum. Forecast reserves of platinum group metals are estimated at 159.3 tonnes, including 16.2 tonnes of platinum, 125.5 tonnes of palladium and 17.6 tonnes of rhodium.