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 projects capacity, was approved by the companys 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 projects capacity could be increased by as much as 45 percent.
The expansion is expected to be financed via the groups 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 companys 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 hadnt 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.