Jinchuan Group to take 51% stake in Zambia's nickel mine

Aug. 6, 2009 (China Knowledge) - China's Jinchuan Group Ltd, the largest integrated nonferrous metallurgical and chemical engineering enterprise in Asia, will take a 51% stake in Zambian nickel mine Munali, said the African country's mines minister, Maxwell Mwale, on Wednesday, sources reported.

The minister said that Jinchuan, the biggest nickel producer in China, will resume operations at Munali by September after legal issues are settled. The nickel mine halted its operations in March owing to the low price of nickel. Munali was originally expected to produce 10,000 tons of nickel annually.

At the time of closure, Munali was partly owned by Africa-focused miner Albidon Ltd through its unit Albidon Zambia Ltd. Institutions in Australia, Europe, the U.S. and South Africa also held stakes, but Jinchuan's loans to Albidon were converted into equity, diluting the shareholdings of the other owners.

Mwale previously said that the Chinese company would restart Munali in August and would hold more than 70% of the mine, which is located around 60 km south of the Lusaka, the capital of Zambia.

Gansu-based Jinchuan plans to raise its total output in 2009, producing 125,000 tons of nickel, 400,000 tons of copper, 7,800 tons of cobalt and 2.1 million tons of chemical products this year, according to an earlier report from China Knowledge.