Chinese Company Halts North Korean Copper Project
By Interfax China
11 Jan 2007 at 07:15 AM EST
resourceinvestor.com
SHANGHAI (Interfax-China) -- Shandong Guoda Gold Group, China's leading gold refinery, recently halted its Hyesan copper mine project in North Korea as a result of opposition from the government, a company official said yesterday.
"The project has stumbled due to shifting policies from the North Korean government. We recently started re-negotiating with the local government," an official surnamed Zhao with the investment department of Guoda Gold said. "It is hard to reach a satisfactory deal as major government departments in the province where the Hyesan copper mine is located have different opinions and always change their minds."
The joint venture project was agreed to in December 2004 and involved a RMB 440 million ($51.30 million) investment, and the DPRK government approved the project and granted an exploration license in early 2005. Guoda Gold holds a 51% share in the venture.
Guoda Gold will be seeking to persuade local government to move ahead aince the Hyesan copper mine, the largest copper deposit in Asia, has a huge potential economic value and several Chinese companies are also showing an interest in it, he said.
The Hyesan mine has 1.5 million tonnes of copper reserves, 60 tonnes of associated gold, and 16,000 tonnes of associated silver.
Guoda Gold has invested RMB 7 million ($897,700.60) so far into the design of the project. It has not started any substantial construction of the project.
In 2005, Guoda Gold established a joint venture company in Jilin Province with a local government-owned company to push the project ahead more smoothly.
"The DPRK government had asked Jilin to swap power and crops in exchange for copper ores from the project, which was accepted by Jilin, and our company had even prepared the crops for supply, however, it seems North Korea wants more than that," Zhao said.
Besides Guoda Gold, state-owned China Nonferrous Metal Mining Group Co. Ltd. signed a cooperation agreement with the North Korean government-owned mining company in mid-September to co-develop the Hyesan Copper Mine.
In mid-December, the Luanhe Industrial Group, a private steelmaker in Hebei Province, signed an agreement to buy a controlling stake in the Hyesan copper mine.
Zhao said other Chinese companies also had similar problems as Guoda Gold.
© InterFax-China 2006. For more intelligence on Chinese metals and mining, click here or call Alison Crawford in London on +44 (0) 20 7256 3919. |
