Lack of power (electricity) played a big role, as did a number of other factors. Here are some extracts from various documents, including Kenmares Annual Reports....
6.11.8.1. Ancuabe The abandoned Ancuabe mine and dressing plant are located 100 km west of the port of Pemba. Grafites de Ancuabe Lda. stopped production and placed the mine on care-and maintenance
due to the cost of supplying its own electricity using diesel fuel. Since then, Electricidade de Mozambique included the Ancuabe mine in its Cabo Delgado province rural electrification project. Power lines have been extended to the site of the mine from the national grid. Timcal and Kenmare have considered re-opening the mine. Club of Mozambique (2010a) quoting the Maputo-based daily Noticias, has reported that Graphit Kropfmuhl is interested in exploiting graphite deposits in the Ancuabe district of Cabo Delgado Province. The national director of mines, Eduardo Alexandre, is reported as saying that Graphit Kropfmuhl AG aims to begin mining graphite in Ancuabe in the first half of 2012. Graphit Kropfmuhl AG wants to launch an exploration programme at Mazeze in the Chiure district, where deposits of graphite are confirmed in two areas. The feasibility study will be submitted to the government in the first quarter of 2011 (Club of Mozambique, 2010a). The Ancuabe graphite deposit occurs as a zone 4 km long and is about 80 m thick (Mining Journal, 2000). Three ore types have been identified: primary ore, containing some 4.3% graphite (up to 50 m thick); eluvial ore containing 4.43% graphite (3m - 9 m thick); and colluvial ore containing 4.65% graphite (up to 80 m thick). The eluvial and colluvial ore make up about 15% of the deposit. It is estimated that total resources of some 35 Mt exist in the area (Mining Journal, 2000). Mitchel (1993) ran bench scale tests on three samples of Ancuabe graphite (fresh core with 11% graphite, weathered rock with 13% graphite and eluvial soil with 9% graphite). Air classification produced concentrates with up to 73% graphite and up to 71% recovery whilst froth flotation produced concentrates with up to 90% graphite and a recovery of up to 72%. In the case of the froth flotation test up to 85% of the head material was first rejected with air classification. Bateman set up a 7.5 ktpa multi-stage flotation process, followed by drying and screening to recover marketable graphite (Bateman, 2010 I see Figure 25).
http://www.trademarksa.org/sites/default/files/publications/Report | Mozambique Mineral Scan.pdf
GRAPHITE Superior Graphite has injected US$1.2 million into Grafites de Ancuabe S.A.R.L. ("GDAS"), the project company which owns the Ancuabe Mine, to gain a 12% interest in the outstanding common stock of that company. GDAS has a significant number of outstanding preference shares. When these are taken into account, Superior’s investment gives it 3.2% of the total GDAS equity . I stated in last year’s Annual Report that the lenders had agreed to convert the GDAS project debt into preference shares. This transaction, together with the investment by Superior, makes the Balance Sheet significantly stronger. Despite continued efforts by management,
production from the Ancuabe mine has been disappointing and has resulted in losses for the year under review. As a consequence we have asked LTA/Bechtel to review the operation of the existing plant and to develop a plan to improve production to rated capacity. Furthermore, LTA/Bechtel is to generate a study detailing changes necessary to raise capacity to circa 1,400 saleable tonnes of graphite per month. 3 Graphite Plant Filter Press Operator
The Ancuabe Graphite Mine is constrained by production, not market. Any expansion will be based upon a clear indication from our major consumers of their desire to acquire additional product.
Ancuabe Graphite Mine The Ancuabe Graphite Mine in Mozambique is the world's leading producer of high quality natural flake graphite. ‘Kenmare Flake’ offers consistent high purity and large flake size, making it suitable for the most demanding applications. The Ancuabe Graphite Mine produces natural large flake graphite with grades of up to 98.5% carbon, without chemical leaching. This is possible by the advanced production process and the unique characteristics of the ore. The production process encompasses various stages of flotation, milling, filtering, drying and dry screening of the final concentrates. All graphite is produced from the same orebody thus ensuring consistency of flake size distribution and purity levels. Demand for ‘Kenmare Flake’ has remained strong in the niche markets which we serve. We achieved price increases in 1998 despite the general commodities downturn. During the early months of 1998,
the graphite mine experienced difficulties with the plant generator sets. These problems were resolved with the installation of additional filtration and new alternators with an increased capacity rating. The mine output immediately started to improve and by August the mine was producing at circa 600 tonnes per month. Production continued to improve, averaging in excess of 600 tonnes per month until early December. At this level, the mine covers its costs and provides some cash to Kenmare.
In December-January there was an exceptional drought. Lack of process water disrupted production. We had already constructed an additional water storage reservoir, but needed the rains to fill it. The rains came in mid-February, rather than late November, as is usual. After this period of drought, which exceeded anything in the thirty years of meteorological records, the rains were exceptionally heavy. The resultant flooding prolonged the period of production disruption. We are conscious of the need to further improve production. Consequently, we have engaged LTA Process Engineering Limited (South Africa) and Bechtel Corporation (USA) to undertake a study of the existing plant at Ancuabe and to report on the options available for expansion. LTA/Bechtel has made a number of specific recommendations to allow the existing plant to increase output to target levels. These recommendations are being acted upon. LTA/Bechtel is also developing a detailed study which will allow the plant capacity to increase to circa 1,400 saleable tonnes of graphite per month. Such an expansion will only be undertaken following a clear indication from our major consumers of their desire to acquire additional product. Kenmare has already had preliminary discussions regarding the financing of such an expansion, including with the European Investment Bank which has confirmed its interest. Superior Graphite Company completed its investment in GDAS subsequent to the year end. Under the investment agreement, Superior made sales based incentive payments of US$1.1 million, extended a loan of US$200,000 and earned an interest in the Ordinary Shares of GDAS for US$100,000. Incentive payments relating to 1998, amounting to IR£553,000, have contributed to a reduction in the reported loss for 1998. The equity interest has been calculated at 12.08% of the Ordinary Shares and represents an investment of 3.2% in the total equity in GDAS. Together with the conversion of the project debt in GDAS, the completion of this agreement strengthens the GDAS Balance Sheet and puts the Ancuabe Graphite Mine in a much stronger position.
http://www.kenmareresources.com/~/media/Files/K/Kenmare-Resources-PLC/Annual Reports/kenmare-annual-report-98.pdf
Ancuabe Graphite Mine In October 1999, following the withdrawal of Superior Graphite Inc as distributor and provider of working capital and
in light of declining prices in the international graphite market, it was decided to put the Ancuabe Graphite Mine on care and maintenance. Kenmare is investigating with the Government of Mozambique how to restart the project in view of the fact that the authorities are planning to introduce electrification to the area.
Grid electricity would cut about US$500,000 per annum from our operating costs. Also, studies have indicated that a further plant expansion would boost production and profitability. The financial statements provide in full for Kenmare’s investment in GDAS, the project company for this mine.
http://globaldocuments.morningstar.com/documentlibrary/document/64bdb5b50d041360.msdoc/original
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