Aug 26, 2010 (Bloomberg)-
Jiangxi Copper Co., China’s largest producer of the metal, plans to raise 6.75 billion yuan ($1 billion) from exercising warrants issued in 2008 to fund projects in Peru and Afghanistan.
The funds will be used to expand production at Dexing mine in Jiangxi, the Aynak copper mine in Afghanistan and the Northern Peru Copper Corp. project, the company said in a statement to the Hong Kong stock exchange last night.
Jiangxi Copper posted a 73 percent gain in first-half profit and expects nine-month profit to grow more than 50 percent, it said yesterday. The company, which buys two-thirds of its raw materials, wants to obtain supplies from its Peruvian and Afghan projects to meet expansion plans.
"Second half is looking likely to be lower than first half,” Citigroup Inc. analyst Thomas Wrigglesworth said in an Aug. 25 report
Exercising the warrants will create “some headwinds,” he said.
Jiangxi Copper rose 2.2 percent to HK$16.46 at 10:52 a.m. in Hong Kong trading, narrowing the year’s decline to 10.4 percent.
The company said it will exercise the warrants from Sept. 27 to Oct. 8. Jiangxi Copper and partner China Minmetals Nonferrous Metals Co. bought Northern Peru Copper Corp. for C$455 million ($430 million) to develop the Galeno copper and gold deposit in Peru.
The project, in which Jiangxi Copper owns a 40 percent stake, is scheduled to produce 200,000 metric tons of copper from 2012, the company said.
The Aynak field, where mining was blocked by war in the 1980s, holds 11 million tons of copper metal, according to Jiangxi Copper’s estimate in 2008.