WASHINGTON (Reuters) -Mining investment firm Cove Capital will develop a large tungsten deposit in Kazakhstan with the state mining firm JSC Tau-Ken Samruk under a deal to be announced by the Trump administration on Thursday.
The agreement is part of a suite of deals announced between Washington and Astana to tighten economic partnerships between the countries.
Cove Capital will control 70% of a joint venture and sales of the metal, with Tau-Ken Samruk controlling the remaining 30%, according to a document
seen by Reuters. Costs to develop the Northern Katpar and Upper Kairakty projects - in the country's east - are estimated at $1.1 billion, while the U.S. Export-Import Bank has issued a letter of interest to fund $900 million.
Tungsten, used to harden steel for a range of industries, is considered a critical mineral by the U.S. government. The U.S. has not mined the metal since 2015 and China is by far the world's largest producer. Supplies of the metal from the Kazakhstan projects will be used "to prioritize U.S. government and American commercial needs," according to the document.
"This is a generational win for the U.S. and its critical minerals needs," Cove CEO Pini Althaus told Reuters.
Althaus, who was previously the CEO of USA Rare Earth, said U.S. President Donald Trump and Commerce Secretary Howard Lutnick personally helped negotiate the deal to prevent Chinese companies from developing the asset.
"This has just been a very under-explored part of the world, from a U.S. point of view, and vice versa," Deputy Secretary of State Christopher Landau said at a C5+1 business conference event at the Kennedy Center on Thursday, which included Kazakhstan officials.
Mine construction should start within two years and production should commence within 3-1/2 years, with refining also occurring inside Kazakhstan, Althaus said.
(Reporting by Ernest Scheyder, Trevor Hunnicutt and Daphne PsaledakisEditing by Rod Nickel)
