North entrepreneur Karl Watkin has bolstered his Chinese mining interests with the acquisition of a nickel mining company with an estimated $5bn in reserves.
Mr Watkin said yesterday he planned to merge the company, which has mines on the Chinese border with Kazakhstan and Afghanistan, with his existing copper mining businesses in the country to create a new company, China Base Metals.
The Northumberland entrepreneur, who founded Middlesbrough-based alternative producer D1 Oils and has interests in aviation, mining and healthcare companies, said the new company would be floated on the Alternative Investment Market next year.
He said: "The intention is to bring it to market. And I anticipate that would take place some time next year. We would float a minimum of 25% of the company ... you have got to give the liquidity to the marketplace. We would be looking to raise £25m or £30m." Some £20m of the cash raised will go to China Base Metals chief executive Ming Liu, who sold the nickel mining company - Nickel King - to China Base Metals.
Mr Liu, described by Mr Watkin as a "mining engineer and entrepreneur", will receive the cash and shares in China Base Metals worth £60m, at the time of the company's floatation.
Mr Watkin said China Base Metals's deposits - independently assessed by two Australian engineering and geological survey firms, and within 80km of each other - has an estimated value based on today's prices of between $7bn and $10bn.
He said: "The copper is in production now but in a small way.
"Both will be up and running in a major way come next year. Several thousand tonnes of both metals.
"It will be increasing from January next year up to $30m a year. It is a substantial business." Mr Watkin said the cash from the float not used by Nickel King - expected to be between £5m and £10m - would be used for updating equipment.
He said: "It would be used for improving the mines because the mining facilities are really primitive.
"The first thing we would do is buy the guys helmets and boots, it is as basic as that out there. Then we would bring it up to European standards."
China Base Metal will service the country's booming economy which was the world's second biggest consumer importer of copper after Japan, producing three million tonnes of copper last year and consuming nearly four million tonnes.
Mr Watkin has previously said his two copper mining companies - Toksum Mining and China Copper Mines - could be producing enough of the metal to rival China's largest producer, which in 2005 mined around 450,000 tonnes, within two years.
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Analysis
On one thing his admirers and critics can surely agree: Karl Watkin will never die wondering what might have been.
The former Wallsend Grammar School boy has led a chequered career, from dotcom firm J2C - a government and transport industry procurement website, which left thousands of shareholders out of pocket after the market's crash in 2000 - to fledgling biodiesel producer D1 Oils, which has planted 156,000 hectares of jatropha across two continents but is yet to turn a profit.
And Mr Watkin has thrown himself into the latest global economic zeitgeist - China - with gusto and commitment.
A gold mining company floated by him last April and listed on London's AIM - China Goldmines - last month announced it had paid £12m for eight mines in Hunan province, with verified deposits of up to a million ounces.
This followed news that he proposed to float another Chinese company - owner of deposits of molybdenum, a metal used to strengthen steel - on AIM this summer and raise up to £50m.
And Mr Watkin announced last week that he had offered the London Stock Exchange a stake in a proposed Chinese alternative to the AIM.