Mumbai: US power utility AES Corporation has agreed to sell its power plant and coal mine in Kazakhstan to London-based Kazakhmys Plc for up to $1.48 billion.

Arlington, Va-based AES owns the 2250 KW Ekibastuz coal-fired power plant - largest power plant in Kazakhstan - and a 3.1 million tonne coal plant in Maikuben West. The mine is expected to hold reserves for another 30 years.

The power plant and the coal mine, located in northeastern Kazakhstan, had combined sales of $149 million in 2006. The mine supplies about 20 per cent of the plant's fuel requirements.

Kazakhmys is self-sufficient in power supply, and will sell electricity from Ekibastuz or use it for future projects.

AES, however, will manage the assets until December 2010 on behalf of Kazakhmys.

London-based Kazakhmys is Kazakhstan's biggest copper producer.

AES sold the plant at a 150 per cent premium. AES can use cash proceeds from the asset sale to repay $730 million of high-interest rate debt and repurchase stock, analysts said.

Kazakhstan estimates its power sector investment needs at around $22.4 billion, to raise generation by two-thirds through 2015. The government expects electricity demand in the country to expand more than 6 per cent a year through 2011.

The deal is expected to close in the second quarter. The acquisition, however, is subject to approval from the government.