(Yicai) Feb. 4 -- Shares of Naipu Mining Machinery plunged after the Chinese supplier of mining equipment withdrew from the acquisition of a stake in CMH Colombia, which owns the development rights to Colombia’s Alacrán copper-gold-silver mine.

Naipu [SHE: 300818] closed down 17 percent at CNY40.86 (USD5.89) in Shenzhen today.

Naipu will not complete the acquisition of a stake in CMH Colombia, a joint venture between Canada’s Cordoba Minerals and China’s JCHX Mining Management, because Cordoba Minerals demanded adjustments to the acquisition payment terms, Colombia’s Autoridad Nacionál de Licencias Ambientales had not yet approved the transaction, and rising global geopolitical risks, the firm announced yesterday.

In May last year, JCHX announced it would buy the other half of CMH it did not yet own through its Swiss subsidiary Veritas Resources for USD108 million to USD128 million, based on copper prices on the London Metal Exchange at the specific time of acquisition. To fund the move, Veritas would issue new shares to Naipu and two other investors.

Veritas was expected to begin developing the Alacrán copper-gold-silver mine once the deal was completed. That included building facilities for the production of copper concentrate and gold-silver concentrate, with an expected construction period of two years and an estimated mining life of 14.2 years.

The total investment amount for the development of the Alacrán project was USD420.4 million, which was expected to be shared by the shareholders of Veritas in proportion to their holdings, according to JCHX’s initial plan.

Back in May last year, Naipu said that it would invest up to USD51.3 million to become the second-largest shareholder of Veritas, with a nearly 23 percent stake.

The Alacrán copper-gold-silver mine is an open-pit mine. In its life cycle, it is expected to recover a total of 797 million pounds of copper, 550,000 ounces of gold, and 5.35 million ounces, according to the project feasibility report provided by JCHX.

JCHX has not yet unveiled the extent of the impact Naipu’s withdrawal will have on its acquisition plan. Its stock [SHA: 603979] dropped 0.5 percent to CNY75.33 in Shanghai today.

Editor: Futura Costaglione