Zambia: Update on Mining Operations - Part III

THIS POST WAS ORIGINALLY PUBLISHED JUNE 28, 2010

Zambia: Update on Mining Operations - Part III

We are continuing with the review of mining companies that operate in Zambia.

Glencore International AG is a privately held commodity trader, headquartered in Baar, Switzerland.
Mopani Copper Mine is an integrated copper and cobalt producer located in the Copperbelt of Zambia.
This JV shareholders are:

• Glencore International AG - 73%
• First Quantum Minerals Ltd - 16.9%
• ZCCM Investments Holdings Plc - 10%

This June it was reported that Mopani Copper Mines has invested more than USD 1 billion in its operations. Investments in operations in Kitwe and Mufulira mines in the past 10 years has exceeded investment by privatized mines in Zambia.

Mopani's operations consist of four underground mines, a concentrator and a cobalt plant in the town of Kitwe and an underground mine, concentrator, smelter and refinery in the town of Mufulira. The capacity of the Mufulira Copper Smelter is being expanded in a phased approach to 870,000 tons of concentrate by the end of 2010. The current capacity with the new Isa smelt furnace is 650,000 tons of concentrate.
Also, the company has four SXEW plants (Solvent Extraction and Electrowinning), two at Mufulira and two at Nkana. The feed is sourced from both in-situ leaching, vat leaching and heap leaching. Glencore's initial interest was acquired through a subsidiary in 2000
Production capacity

• 255,000MT Copper metal
• 2,200MT Cobalt

Number of employees 7,800
A very interesting essay on Mufulira Mine can be viewed here. It has this map

Also for social network fans – here is a link to Mufulira Facebook page
Zambezi Resources Limited (Zambezi) is exploring for and developing copper and gold projects in Southern Zambia. Zambezi has identified seven major project areas, which it is actively exploring. The projects have been identified as Iron Oxide Copper Gold (IOCG) type deposits and also shear-hosted gold deposits. These projects are contained within eight prospecting licenses covering an area of over 16,000km². Zambezi currently retains 100% ownership of its projects, although Zambia's abundant mineral endowment has lead Zambezi to seek joint venture partners to assist with funding exploration on some of its projects.
Zambezi listed on the London Stock Exchange’s AIM in July 2004, raising £2.5 million.  Since then Zambezi has raised an additional £14 million on AIM through subsequent placements, including a strategic placement to Glencore.  In July 2007, Zambezi successfully listed on the ASX through an IPO, raising an additional A$15 million.
An outdated (2008) Corporate brochure  maybe downloaded here
Zambezi’s relatively mature exploration portfolio and the removal of the retention license option in Zambia in early 2008 severely constrained Zambezi’s strategic options. ZRL voluntarily suspended trading on the ASX on 30th October 2008 and on AIM on 3rd November 2008 in order to secure the finances of the Company. The Company’s story and current status can be viewed at this delisted Web-site.
More coming soon…

UPDATE:
I would like to pinpoint to today's long piece in the Zambian Watchdog: What is happening to Konkola Copper Mines? This has a very detailed critique of the Zambian mining industry and concludes with the following:

"Government should immediately review the entire regime governing the mining sector and to avert the boiling social crisis and despondency that has engulfed the Copperbelt. This will also allow realistic financial benefits to accrue to the country and its citizens. The country should be allowed to collect a credible share of revenue from this wealth. Government has a duty to protect the rights of workers, to provide social service to local communities, and to be an effective regulator in order to protect the environment."

Zambia: Update on Mining Operations – Part II

THIS POST WAS ORIGINALLY PUBLISHED JUNE 24, 2010

Zambia: Update on Mining Operations – Part II

In continuation of our previous post we are looking at major mining companies in Zambia. Equinox Minerals Limited is an international mining company that is dual listed on the Toronto Stock Exchange and the Australian Securities Exchange (Symbol: 'EQN'). Since 1999 it is operating a 100% owned large scale Lumwana copper mine. Situated 220 km west of the Zambian Copperbelt, Lumwana is now a major open-cut copper mine -- at initial design capacity, Lumwana will process in excess of 20 million tons of ore per year, mined at an average life of mine strip ratio of 4.2:1.  Lumwana ore, which is predominantly sulphide, is treated through a large conventional plant, producing a copper concentrate for sale to local and international offtakers. In 2008, Equinox completed a uranium feasibility study (UFS) investigating the onsite treatment of discrete, high grade uranium mineralization contained within the Lumwana mine copper pitshells. The UFS confirmed the potential viability of onsite uranium treatment, producing about 2 million pounds of uranium per year over a six to seven year period.
The Latest corporate presentation (of June 21, 2010 can be downloaded  at this link ) describes all corporate activities in the country, and has this brief overview:

The Company is reporting that Lumwana production for the first two months of Q2-2010 totaled 29,733 tons (66 M lbs) of copper in concentrate - a 46% increase on the average monthly production results of Q1-2010 and a 83% increase on the average monthly production results for the corresponding period Q2-2009. Equinox has maintained its full-year production guidance of 135,000 tons of copper in concentrate for this year, at a cash cost of $1,35/lb.
The Company has begun studies into a phased capacity expansion at Lumwana mine. This will examine an initial expansion to 24-million tons, which Equinox believes could be achieved with limited additional spending and within an 18-month timeframe, followed by a further increase to an eventual 35-million tons a year.
 First Quantum Minerals Ltd., a growing mining and metals company, is engaged in mineral exploration, development, mining and refining. The Company produces LME grade "A" copper cathode, copper in concentrate, gold and sulphuric acid. First Quantum's common shares are listed for trading on the Toronto Stock Exchange in Canada (symbol "FM"), the London Stock Exchange (symbol "FQM") in the United Kingdom. First Quantum is a member of the S&P/TSX 60 index.
Investor presentation contains major data on all projects, including the following:

 Kalumbila Exploration Projects (100%), Zambia

• Acquired for cash and shares valued at approx. US$260M in January 2010
• Main asset is a controlling interest in mineral prospecting licenses covering 2,850 km2on the periphery of the Kabombo Dome
• Includes the Kalumbila copper deposit —undergoing infill drill program to establish indicated resource on the open-pittable mineralization identified by drill results to date
• Also includes the Kawako nickel and the Kawanga uranium prospects

 Kansanshi Copper-Gold Mine, Zambia

• 80% owned, in Zambia
• Located in the North Western Province
• Achieved commercial production in 2005
• 13-year estimated mine life; 20-year including inferred resources
• Extensive drill program to update reserves and resources estimate completed

   Bwana Mkubwa Copper SX\EW Plant, Zambia

• 100% owned, in Zambia
• Produces copper cathode and sulphuric acid
• Currently processing the Lonshi oxide ore at an output level of approximately 800 tons per month

 The company is fast-tracking development of the Kalumbila copper project, which it acquired last year through the takeover of Kiwara Plc. The project could be producing as early as 2013 and could churn out as much as 150,000 tons of copper a year. A very cognitive story on Kansnashi mine was recently produced by the Vancouver Sun (A bittersweet story in Zambia).

More to follow…..

Investing in African Mining: Zambia (Final)

THIS POST WAS ORIGINALLY PUBLISHED DECEMBER 20, 2009

Investing in African Mining: Zambia (Final)

The Zambia Development Agency (ZDA) has been set up to further economic development in
the country. The Agency produced an  INVESTORS GUIDE HANDBOOK which in detail describes investment process with all peculiarities: who is considered an investor, what are investor incentives, how to get permits, what are the taxes, etc. The Web-site promotes mining as follows:
“Zambia has enormous reserves of Copper-Cobalt ore and the country is the fourth largest producer of copper metal. Gold, Nickel, Lead-Zinc, Iron and Manganese are also mined. In addition Zambia is endowed with very high quality of Gemstones - Emerald, Amethyst, Aquamarine, Rubies, Garnets, and Diamonds - which are still unexploited. With the privatisation of the mining sector, potential opportunities have become very attractive.”

Copper mining, as it obvious from the previous post, is a major sector of mining industry in the country. Here is Zambia’s position in the world exporters:

Source: World Copper Factbook 2007, ICSG
Copper mining has a long and tumultuous history. This detailed paper:
FOR WHOM THE WINDFALLS? Winners & losers in the privatisation of Zambia’s copper mines
describes the history and current state of copper mining in Zambia, one of the illustrations:

One of world’s largest sources of copper ore is found on the border of Zambia and the Democratic Republic of Congo, in a region known as the Copperbelt.

“The Zambian Copperbelt accounts for approximately 46 percent of the production and reserves of the Central African Copperbelt, the largest and highest grade sediment-hosted stratiform copper province known on Earth. Deposits in the Zambian Copperbelt are hosted by the Neoproterozoic Katangan Supergroup, a relatively thin (~5 km) basinal succession of predominantly marginal marine and terrestrial metasedimentary rocks that lacks significant volumes of igneous rocks. The stratigraphic architecture of the Katangan Supergroup in the Zambian Copperbelt is comparable to that of Phanerozoic rift systems.” … more is here
Equinox Resources NL  provides a good description of the Cooperbelt in their ZAMBIA: EXPLORATION POTENTIAL FOR IRON OXIDE.

Copper mining in Zambia is a successful operation – which may be judged by this example – First Quantum operations (sourced from First Quantum Minerals Ltd. 2008 Annual report). The company operates Kansashi copper-gold mine:

Source: Kansashi Fact Sheet

 

And these operating results:

Another mineral: Coal -- is active in Zambia since 1967. The main source is the Maamba coal mine (78.2 million tons of coal reserves), an opencast operation in the southern part of the country near Lake Kariba. It is owned by  ZCCM, a government entity. The mine produced about 600,000 tons of coal a year in the 1980s, but due to lack of financing it was down to 100,000 tons. Just yesterday, it was announced that Singapore’s Nava Bharat Pte Ltd took over the running of Zambia’s Maamba Collieries and signed an agreement to build a 300-megawatt thermal power plant.
There lots of other resources on Zambia mining and investments, some of them are:

• Zambia Budget 2010
• Mines and Minerals Development Bill 2008
• Foreign direct investment (FDI) overview, selected years by UNCTAD
• Dr Mpande at the School of Mines, UNZA has put together this wonderful chart showing that Zambia's tax take is in effect negative given the VAT rebates. Zambia-Mining-RevenuePresentation to Economic Association of Zambia Forum on Mining tax in Zambia
• Standard Bank - Zambia Annual Economic Outlook
• Undermining development? Copper mining in Zambia – a report analyzing Konkola Copper mine developments
• China-Africa Economic Relations: The Case of Zambia
• THE GEOLOGY AND MINERAL RESOURCE Kasempa Mining Ltd
• Munali Nickel Project, Zambia