KAZ Minerals Russia LLC

KAZ Minerals Russia LLC is a subsidiary company representing KAZ Minerals Group of Companies in Russia, which implements large-scale, low-cost copper production projects in Kazakhstan, Russia and Kyrgyzstan. KAZ Minerals Russia LLC performs the functions of the sole executive body and the management company for GDK Baimskaya LLC.

The Group operates open pits of Bozshakol in the Pavlodar region and Aktogay in the East Kazakhstan region, three underground mines in the East Kazakhstan area and the Bozymchak open pit gold-copper mine in Kyrgyzstan. The Group’s assets to date also include 6 copper concentrate processing plants, an oxide ore processing complex and a copper cathode production plant. At the moment, the project of construction of the second stage of Aktogay is being implemented with the investments of $1.2 billion, which will result in the increased ore processing up to 63 million tons per year.

In 2020, the Group's production volume amounted to 306 thousand tons of copper, 196 thousand ounces of gold were produced as by-products. In 2020, the Group's revenue exceeded $2.3 billion, EBITDA amounted to $1.4 billion, and the number of employees exceeded 16 thousand people.

In 2019, KAZ Minerals acquired the Baimskaya copper project in the Chukotka Autonomous Region of the Russian Federation for $900 million. One of the world's largest undeveloped groups of copper deposits, the Baimskaya area will play an important role in the production of the copper needed for the transition to renewable energy and low-emission technologies. Bankable Feasibility Study (BFS) for the Baimskaya copper project has been completed and approved by the KAZ Minerals Limited Board of Directors. This represents a significant project milestone enabling the Group to progress with the financing and construction of this world-class copper asset.

The Baimskaya copper project is the planned development of a globally significant copper resource with a forecast capital construction cost of $8.5 billion. The mine is expected to have a life of 20+ years and will start up by the end of 2027, with average annual copper production of 300 kt and gold production of 490 koz during the first ten full years of operation. Life of mine copper and gold processing grades are estimated at 0.47% and 0.27 g/t respectively, with elevated grades expected in the early years of production. The project has competitive net cash costs and is expected to be in the first quartile on the global cost curve. Historic data and drilling conducted during the BFS indicate the potential for the mine life to be extended.

The processing plant will have a total ore processing capacity of 70 Mtpa from two lines, building on the technologies used at the Group’s Aktogay and Bozshakol mines in Kazakhstan.

Pioneering works continue at the mine site and the required infrastructure is being progressed with the Russian government in accordance with the Complex Development Plan for the Chukotka region. A 428 km all-weather road will be constructed between the Baimskaya mine site and a new port will be built at Cape Nagloynyn for the shipment of copper concentrate to market via the Northern Sea Route. Carbon-free power will be supplied to the site from a nuclear facility to be constructed and operated by Rosatom, enabling the Group to produce very low-carbon copper.

The project will use the most up-to-date mining and processing techniques and technologies in the world. Thus, it is planned to use unmanned quarry equipment, including unmanned quarry dump trucks with the carrying capacity of 350 tons, production will be fully automated, control will be carried out from remote control centers. Such technologies will be used in the Russian Federation for the first time.