Kincora Copper’s Bronze Fox copper project in Mongolia has been boosted by the European Bank for Reconstruction and Development’s backing for a nearby project.
The EBRD has arranged USD 350 million in direct and syndicated loans for the Tsagaan Suvarga copper mine on the Oyu Tolgoi south Gobi porphyry copper belt in southeast Mongolia. Privately owned, Tsagaan Suvarga is only 40 kilometers along trend from Bronze Fox.
The investment by EBRD is its largest investment in Mongolia to date and included a commitment to develop new enterprises in the immediate region.
Mr Sam Spring head of corporate development at Kincora said that the EBRD’s move was positive for a number of reasons. These included reducing the region’s infrastructure hurdles; providing a blue print for potential mine development; highlighting the prospectivity of the immediate region; enhancing the potential for regional commercial agreements. It also illustrated the current appetite for mining investment into Mongolia, particularly copper.
With the addition of Tsagaan Suvarga, there will be two huge copper mines under construction within 140 kilometers of Bronze Fox: Oyu Tolgoi with target production of 160,000 tonnes per day and Tsagaan Suvarga with target production of 40,000 tonnes per day.
Mr Spring said that Kincora has secured a strategic landholding in this area with mineralization identified over 40 square kilometers. The Tsagaan Suvarga project, meanwhile, provides a blue print for potential mine development, particularly as it faces very similar infrastructure related barriers to initial production.
He said that Tsagaan Suvarga is a significant scale project investing considerable capital into the immediate region. In order to increase sustainability of the Tsagaan Suvarga project and support linkages, owner MAK and the EBRD are providing joint grants to support the development of small private businesses in the mine’s surroundings. The investment from EBRD and ongoing development of the Tsagaan Suvarga copper mine highlights again the prospectively of the region around Bronze Fox.
Mr Spring said that the ongoing development and recent foreign debt financing of Tsagaan Suvarga is yet another sign that the face of Mongolia will most likely change dramatically over the next 12 months from being perceived as a coal country to copper. The investment from EBRD follows the 'Action Plan' announced last month by the new government that outlines its 4 year agenda.
He said that after a significant amount of uncertainty pre and post the June Mongolian election the dust is finally settling with the proposed Action Plan the first formally documented set of policies from the recently formed Democratic Party lead coalition government. The proposed policy platform is supportive of foreign investment, accommodating to the mining industry and generally provides a very positive foundation for progressive reform particularly in light of recent negative headlines.
Source – Proactive Investors
(www.steelguru.com)
