Ndola Lime production of the product up by 30pct

[bingogo]

Wednesday, 29 Jun 2011
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Ndola Lime Company Limited, Zambia’s sole producer of the neutralizer increased production of the product by 30% because of increased investment in the plant.

According to a report, Ndola Lime Company Limited, situated in northern part of Zambia, lying more than 400 kilometers from the country’s capital, Lusaka, recorded a quicklime production of 173, 669 tonnes during the financial year which ended March 31st 2011.

The rise in production this financial year was the highest output by the company compared to the financial year 1996 to 1997 when it produced 198,535 tonnes. The 2010 to 2011 production output of lime, chiefly used by the mining industries as a neutralizing agent in copper and cobalt production represents an increase of 25% on the previous financial year 2009 to 2010.

According to the company, the increased output was chiefly because of management’s commitment to improve operations which has since seen the refurbishment of various machinery and equipment including the Rotary Kiln Electrostatic Precipitator at a value of USD 3.75 million.

Ndola Lime engaged J and C of South African firm for the dust abatement restoration project. The ESP was commissioned on 20 August last year. With the dust abatement unit fully restored, the Rotary Kiln can be operated for longer campaigns without environmental concerns as the emissions have been reduced from about 7000 mg per Nm3 to within the statutory limit of 50 mg per Nm3. The company opted to spend USD 74 million for recapitalization and increase output of the product which is also export to various neighboring countries including Democratic Republic of Congo, Burundi and Rwanda among other countries.

Last year government noted that the existence of Ndola Lime Company was vital to the country’s growth prospects and that the product was in essence expected to be more profitable compared to copper because of its vast use by the industrial and the agricultural sector in the production of crops.

Mr Maxwell Mwale mines minister of Zambia noted that because that operation as a business is supposed to be a very profitable business compared to copper mining as in terms of price fluctuation is not there but you just supply lime to the mining industry.

Mr Mwale said that even agricultural sector uses lime and so is used even on road construction and for the whole industrial sector. He however, regretted that despite the increasing output capacity, Ndola Lime is not able to meet the demand which is there. But production estimates from Ndola Lime indicates that the demand for lime is set to grow since the mining sector and the economy in general is expanding and that currently, Ndola Lime’s profitability is hindered by the 30 per cent excise duty on heavy fuel oils which pushes up the company’s costs and prices, reducing its competitiveness.

The ongoing USD 74 million recapitalization of the company that would be concluded in 2011, it is projected that the new kiln and plant machinery would be fired on coal and heavy fuel oils hence the company would cut down on cost of fuel. The plant under construction is expected to produce 600,000 tonnes of lime per day from the current 450,000 tonnes per day and it will have new energy efficient and environmental friendly.

According to estimates after the USD 74 million recapitalization project Ndola Lime’s profitability will increase by 30% and the production will increase by 33%. However analysts argue that although government predicts Ndola Lime’s profitability rising after recapitalization, it is anticipated that the company may generate 20% profitability on and create investment USD 15 million by year. If Ndola Lime is dubbed very profitable, it would then generate 30% on investment from USD 20 million to USD 25 million by year and that the future Ndola Lime value would be between USD 150 and USD 250 million.

Recently Ndola Lime announced that it had paid USD 6 million for hydrate plant replacement on the Copperbelt where the new equipment will be fully operational by August this year. According to the company, the equipment to be installed includes the 500 tonnes a day Vertical Kiln that would be either fired by coal or Heavy Fuel Oils, 15 tonnes an hour Hydrating Plant, the Coal Handling Plant and the Lime Packing and Bagging plant.

However said that the construction of the vertical Steel plant and the rest of the equipment awaited more payment and the major reason that led to the plant being shut earlier last year was the high cost of production which stood at USD 0.57 per pound as compared to USD 0.15 per pound being used at the other KCM smelter in Chingola.

Ndola Lime Company limited is 100% owned by Zambia Consolidated Copper Mines Investment Holdings. A subisidiary of government tasked to oversee the privatization of mining companies in the country.

According to data, ZCCM IH owns shares in the following companies as below, Maamba Collieries Limited 35.0%, Konkola Copper Mines Plc 20.6%, Kansanshi Copper Mines Plc 20.0%, Copperbelt Energy Corporation Plc 20.0% and Konnoco Zambia it has 20.0%.

Other companies where ZCCM IH owns shares are Copper Luanshya Mine Plc with 20.0%, Non Ferrous Chine Africa Mining Plc 15.0%, Chibuluma Mines Plc 15.0%, Chambishi Metals Plc 10.0%, Mopani Copper Mines Plc 10.0%, Equinox Minerals Limited it had 2.3% through Lumwana Copper Mines, while in Albidon nickel miner the sole producer it has 1.0% as at end of February 2011.