(Yicai) June 21 -- CMOC Group is selling an undeveloped molybdenum mine in northwest China for CNY2.9 billion (USD399 million) as the world’s largest cobalt producer shifts focus to copper and cobalt, the later one is important raw materials used to make electric car batteries, a company insider told Yicai.

CMOC plans to sell a 65.1 percent stake in Xinjiang CMOC, which owns the East Gobi molybdenum mine in the Xinjiang Uyghur Autonomous Region, to CITIC Guoan Industrial Group, the Luoyang-based company said on June 19. The transaction should give CMOC a net return of CNY1.5 billion (USD206.5 million) on its investment.

CMOC bought the development rights to the East Gobi molybdenum mine 14 years ago, but the mine remains untouched. As such, the sale will not affect CMOC’s current production capacity of molybdenum concentrate and molybdenum metal, the person said.

The company needs funds to develop key projects, he said. At the start of the year, the firm, which almost is the world’s top ten copper producers, said it planned to expand copper output and will start work on the third phase of its Tenke Fugurume copper-cobalt mine in the Democratic Republic of the Congo and the second phase of the adjacent Kisanfu copper-cobalt mine.

Both of these mines, which are located in the Congo’s southern Lualaba province, have some of the world’s largest and highest-grade cobalt and copper reserves. CMOC owns 80 percent of the Tenke Fugurume mine and 71.2 percent of the Kisanfu mine. Battery giant Contemporary Amperex Technology is also a stakeholder in the Kisanfu mine.

Since the Kisanfu mine came online last year, CMOC became the world’s largest cobalt producer. The company mainly supplies cobalt hydroxide, which is a key raw material needed to make ternary lithium-ion batteries, to the international market.

CMOC shifted 389,800 tons of copper last year, 29,700 tons of cobalt and 15,600 tons of molybdenum, according to the firm’s annual report. The company will also explore other new metal resources coming onto the market as well as merger and acquisition opportunities.

Editors: Tang Shihua, Kim Taylor