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Continental Minerals awaiting China's OK on Tibet mine

November 14, 2008

By Lucy Hornby
November 13, 2008 15:10]

BEIJING, Nov 12 - Continental Minerals (Profile) is awaiting central
government approval for a planned $520 million copper and gold mine
in Tibet, which will utilize a new railway to ship ores to a smelter
in inland China.

Financing from underwriters Standard Bank and Industrial and
Commercial Bank of China, or ICBC, is still in the works despite a
sharp global decrease in lending due to the financial crisis, said
chief executive David Copeland.

The company has submitted final paperwork, including a reclamation
plan, for the complex Xietongmen mine. The mine requires a series of
tailing dams and water diversion engineering to prevent mining waste
from contaminating the Yaluzangbu River, in arid western Tibet, said
Dickson Hall, vice president of business development.

"This project has all the elements. It will go ahead," Hall said on
the sidelines of the China Mining conference.

Xietongmen is one of several new mining projects in Tibet made
possible by the railroad to Lhasa, which began operations in July
2006. It will rely on a spur under construction to the town of
Shigatze, due to be completed in 2010.

The railroad, denounced by pro-Tibetan activists as a means for Han
Chinese migrants to flood into Tibet, has enabled the large-scale
mining projects that China needs to feed its rapid economic growth.

"There's a lot of interest in Tibet from miners. It's one of the few
virgin territories left in China," said Xu Weiqin, who runs a
clearing house for buying and selling mining stakes in Lhasa.

Chinese aluminium and copper giant Aluminum Corp of China, or
Chinalco, in September set up a unit to explore in Tibet.

It joined fellow Chinese miners Western Mining Co (Profile) and Zijin
Mining Group Co Ltd (Profile), which plan to begin production this
month from Southeastern Tibet's Yulong copper deposit, which is the
largest in China.

Ore from the Xietongmen mine will be transported thousands of miles
to be processed by smelters owned by state-owned nickel and copper
producer Jinchuan Group, which bought a 14 percent equity stake in
Continental last year.
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