FTSE 100 mining group, Eurasian Natural Resources Corp (LSE:ENRC) has beefed up its presence in the copper and cobalt markets through the acquisition of Chambishi Metals, a Zambian copper and cobalt producer, and Comit Resources, a Dubai based marketing and sales company. ENRC is paying US$300 million for the two companies, and will fund the transaction from its existing cash.
Kazakhstan based ENRC is more traditionally known for its focus on iron ore, bauxite, ferroalloys and manganese, but has been keen to expand into other metals. In 2009, it bought copper/cobalt mining group CAMEC for £584 million in cash, which gave it a footprint in the Democratic Republic of Congo (DRC).
Chambishi Metals currently owns and operates a copper and cobalt smelting business in Zambia, which has production capacity of 25,000 tonnes per annum of blister grade copper and 6000 tonnes per annum of refined cobalt metal. ENRC will invest a further $80 million in the production facilities to increase copper cathode production to 55,000 tonnes per annum. Chambishi will also be integrated into ENRC’s smelting operations in the DRC.
“The acquisition also enables ENRC to fast-track its copper and cobalt expansion and to achieve a higher planned level of combined total capacity, of 130 kt per annum of LME Grade A copper cathode and 12 kt per annum of cobalt contained metal salts and concentrates by 2012,” the company added.