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…..

Mining Investments - WHERE NOT TO INVEST by Behre Dolbear

THIS POST WAS ORIGINALLY PUBLISHED MAY 19, 2010

Mining Investments - WHERE NOT TO INVEST by Behre Dolbear

One of the oldest mining consulting companies in the world Behre Dolbear provides quality advice for mining investors worldwide, and their documents are well respected by industry professionals.

Indeed, when making the right decision about investment strategy it is important to take into consideration as much information as possible.  Since 1999, Behre Dolbear started a political risk assessment of countries important  to the mining industry. This is alleviated by the fact that mining industry is vital to the creation of wealth and prosperity in
any country.

The  Behre Dolbear's assessment includes the high risk and low risk parts of the world for receptivity to mineral investment, as well as information about conditions in the countries such as economic and political systems, social issues, permitting, corruption, etc. It interesting to note that the company has a very peculiar stance regarding their report, as it is mentioned in the preface:
"We recognize that many might consider what we have said to be provocative, which is our intent." 
However, whatever provocative their findings are, they are nevertheless valuable  both in staregy panning and execution of everyday business. This is not technical assessment, as one might expect -  "Geology and mineral potential were not considered, as the fact that exploration, development, and mining activity are occurring confirms the existence of such potential. We recognize that if a major mineral deposit exists in a high-risk country, a mining company might well decide that the financial incentive exceeds the political risk; e.g., Barrick’s Reko Diq project in Pakistan and Banro Corporation in the eastern Democratic Republic of the Congo (D.R.C.)."
The countries are ranked by the following criteria:

• the country’s economic system;
• he country’s political system;
• the degree of social issues affecting mining in the country;
• delays in receiving permits due to bureaucratic and other delays;
• the degree of corruption prevalent in the country;
• the stability of the country’s currency; and,
• the country’s tax regime.

So, this make another essential document that any mining professional has to read and study
It can be downloaded HERE