China’s Zijin to invest in expansion of Serbian copper mines

China’s Zijin Mining Group is planning to expand its Cukaru Peki copper and gold mine in eastern Serbia due to the expected increase in demand for these metals, which is set to outpace supply.

Consulting firm McKinsey projects that the global shift toward a greener economy will drive annual copper demand up to 36.6 million tonnes by 2031. Supply, on the other hand, is estimated to reach around 30.1 million tonnes by the same year, up from the current 22 million tonnes, resulting in a projected deficit of 6.5 million tonnes at the beginning of the next decade.

Zijin, which commenced operations at Cukaru Peki two years ago, is now exploring the possibility of drilling nearly 2 kilometers (1.25 miles) deeper into the mine.

Zijin, China’s largest gold miner and one of the top copper producers in the country, invested approximately $678 million to initiate operations at Cukaru Peki. The mine, situated in the eastern Bor region, comprises an upper and a lower zone. The upper zone produced 111,000 tonnes of copper and 152,000 ounces of gold last year and is expected to have an annual output of 91,400 tonnes of copper and 2.5 tonnes of gold, with the potential for peak production of 135,000 tonnes of copper and 6.1 tonnes of gold.

Upon full operation of both the upper and lower zones, Cukaru Peki is projected to position Serbia as Europe’s second-largest copper producer.

Zijin acquired the copper and gold complex in 2018 during a government auction aimed at preserving thousands of jobs.

The mining company is the sole owner of Cukaru Peki and operates two units in Serbia. One unit produces copper cathodes, gold, silver, and sulfuric acid at facilities co-owned with the government, while the other, Serbia Zijin Mining, manages the Cukaru Peki mine and exports copper concentrate to China, Canada, Bulgaria, Spain, and Korea.

China has made substantial investments in Serbia as part of its Belt and Road Initiative, which seeks to establish new foreign trade connections for local companies.

The Serbian government anticipates that the burgeoning mining sector will contribute between 4% and 5% of the country’s total GDP in less than a decade, a significant increase from its current 2%.

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