Zinc plant of Chelyabinsk acquired 51% of shares of Nova-zinc, a company dealing in mining and processing of lead-zinc ore in Akzhal deposit in Kazakhstan, the company’s spokesperson said to UrBC representative. This is one of the steps to create a vertically integrated corporate structure of Chelyabinsk company.

The money ($70m) was provided via the syndicated loan from the German banking group HVB; the cost of the transaction is not going to be revealed, however.

In 2001-2004, the average annual output of Akzhal ore mining and processing enterprise comprised 38,000 tons of concentrated zinc; the deposit also contains lead, cadmium, and silver. The official zinc reserve comes to 10,224,000 tons; the mining is performed with the help of the open-pit method and comprises Tsentralniy and Vostochniy open-cast mines. The enterprise can cover between 20% and 35% of the needs of Zinc plant of Chelyabinsk (200,000 tons of zinc). Its most prospective characteristics include high-quality concentrate (55% of zinc) and proximity to Zinc plant of Chelyabinsk (1,300 km).

According to Board Member Sergey Moiseev, Akzhal ore mining and processing enterprise isn’t going to be able to cover all of the plant’s needs, so they’ll have to use their regular suppliers as well, for example, Russian Copper Company, UGMK, DalPolyMetal and a number of foreign suppliers.

The plant is hoping to produce 150,000 tons of zinc in 2006.