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Chinalco gets board’s nod on $1.32B project expansion

Keywords: Tags  Toromocho, copper, project expansion, Chinalco, capital expenditures, IPO, initial public offering, Peru mine Claire Hack

LONDON — Aluminum Corp. of China Ltd. (Chinalco) will spend about $1.32 billion to expand the Toromocho copper project in Peru, the company said.

The expansion, which aims to optimize and increase the project’s capacity, was approved by the company’s board June 17.

The approval is still subject to any potential amendments, finalization details and/or shareholder approval.

Construction of the proposed expansion is expected to be largely complete by the second quarter of 2016, with the increased production slated to begin by the third quarter of that year.

An expansion feasibility study shows that the Toromocho project’s capacity could be increased by as much as 45 percent.

The expansion is expected to be financed via the group’s internal working capital, as well as by reallocating the proceeds from its initial public offering (IPO) and debt financing. This includes, but is not limited to, bank loans.

A total of 30 percent of the proceeds from the company’s IPO were originally intended for the purchase of nonferrous and nonaluminum mining projects, which will now contribute to the cost of the expansion.

As of March 28, Chinalco had already used more than 49 percent of the funds, and as of June 17 it hadn’t identified any suitable acquisition targets.

The company will carry on with its acquisition strategy, and any future acquisitions will be financed using other internal resources and external financing.

A version of this article was first published by AMM sister publication Metal Bulletin.

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