MMG

Peru – MMG’s non-wholly owned subsidiary Minera Las Bambas S.A (Las Bambas) has entered into a rail agreement with Perurail S.A. (Perurail) for the transportation of Las Bambas copper concentrates.

Located in Cotabambas, Apurimac region of Peru, Las Bambas is a large, long-life copper development project. When in operation, it is expected to become one of the top three copper producing mines in the world.

The agreement with Perurail provides for the transportation of concentrates by rail from Pillones transfer station to the Port of Matarani, a distance of approximately 295 km. The agreement is expected to commence on 1 January 2016 for a period of 15 years with an option to renew for a further 15 years.

The estimated total consideration payable by Las Bambas for the provision of the rail services during the initial 15-year term is US$489.3 million.

MMG CEO Andrew Michelmore says, “Safety is our first value at MMG. By using rail transportation where available we will significantly reduce heavy vehicle traffic between Pillones and the Matarani Port – improving safety conditions for communities and reducing congestion.”

To ensure equipment is in place to meet the project timetable, Las Bambas has previously entered into purchase contracts for rail wagons, containers, turning equipment and locomotives.

This equipment will be purchased by Perurail with the consideration (total cost $76.1 million) payable by Perurail to Las Bambas before the initial term commences.

Construction of Las Bambas continues to progress to plan with the overall project 90% complete at the end of March 2015. Current activity is focused on the primary crusher, overland conveyor, concentrate processing plant, concentrate logistics and other key infrastructure.

Las Bambas is a joint venture project between operator MMG and wholly owned subsidiaries of each of Guoxin International Investment and CITIC Metal.

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