production to begin end 2007

Zambia copper back to 1970s heyday by next year, govt official predicts
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Zambia's copper production would be up to heyday Seventies levels next year, Zambia's permanent secretary Lennard Nkhata said on Thursday.

Nkhata predicted a production of 700 000 t at the end of 2007 when the new large Lumwana copper mine would be brought on stream. He said that the situation had been completely reversed since Anglo American plc decided to exit Zambia in 2002 and that production at the end of this year would be 500 000 t.

Speaking at the Africa Downunder conference in Perth, Nkhata highlighted many remaining minerals opportunities for investment in Zambia and outlined the suite of incentives available from the Zambian government.

“The Zambian mining industry nearly suffered a paralysis in January 2002 when Anglo American Corporation, then a lynchpin of the business, announced that it would abort its operations at Konkola Copper Mines plc.

“At the time, that decision had a devastating impact on the mining sector. But I am glad to say that, as a result of attractive incentives being offered by our government, the situation has been reversed.”

He said that strategic Indian partner of repute, Vedanta, had successfully replaced Anglo and since then many other investors had moved into the mining industry.

Together these had injected more than $1,4-billion into the economy since 2002, some of which had gone into plant rehabilitation, plant expansion and new facilities, including the opening of new mines.

The Chamber of Mines of Zambia had estimated that companies would invest another R1-billion dollars in the next three years to “put the industry on an even keel”.

Leading the list of projects with equity potential for investors was the $400-million Konkola Deep Mining Project (KDMP), which was expected to be fully developed in 2009.

The KDMP would increase mine life by at least 30 years and would be one of the largest investments, increasing copper production from two-million tons to six-million tons a year, from a reserve base estimated at 300-million tons at 3,5% copper.

Another very important project with prospects for participation by other investors was the Lumwana copper project in the North Western Province by Australian company Equinox.

The expected investment was some $700-million into one of the world's largest undeveloped copper deposits in order to recover well over 17-billion pounds of copper metal in the ground.

This project was capable of sustaining mining operations for 40 years. It was a low-grade deposit with a copper concentration of less than half of the 3% typical of the CopperBelt.

This meant that Lumwana required substantial capital investment to provide the appropriate economies of scale.

Copper production was steadily increasing in Zambia from 331 000 t in the year that Anglo decided to abort to 372 000 t in 2003, 374 000 t in 2004 and 402 000 t last year.

Zambia would produce 500 000 t this year with the coming on stream of Kanshanshi mine.

“When we add Lumwana coming on stream next year, production levels should reach the 1970s figure of 700 000 t, when Zambia was in the heyday of copper production,” Nkhata predicted.

Exploration taking place promised more output of copper and other metals, including nickel, for which another Australian company was exploring, 60 km south of Lusaka.

Mine development and nickel production was expected to begin at the end of 2007.

There were companies exploring east of Lusaka for metals, including gold and copper, and already the results were promising.

Several new copper developments were being done in joint venture with Glencore, owner of Mopani Copper in Zambia and significant other copper interests.

This would result in an acceleration of exploration and development of new mines.

Opportunities for further mineral exploration abounded.


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Published: 2006/09/07 Printer friendly:

Author: Martin Creamer
Portfolio: Publishing Editor
E-mail: [email protected]