A gem in Konkola North Mine

[bingogo]

A gem in Konkola North Mine

By Bennet Simbeye

THE launch of the US$400 million Konkola North Copper Mines (KONNOCO) last week is another milestone in the mining industry which is already enjoying a buoyant outlook and contributing about 80 per cent of Zambia’s export earnings.

The joint venture between African Rainbow Minerals (ARM) from South Africa and Vale from Brazil, got off the feet barely five months after the commissioning of phase one Konkola Deep Mining Project (KDMP) under Konkola Copper Mine(KCM) in the same town of Chililabombwe.

The unprecedented economic activity, brought by increased investment in the mining sector has underscored the real possibility of job creation, revival of various business activities and the potential to significantly contribute to national coffers through tax payment.

Konkola North Copper Mine whose first copper production is expected in 2013, has already employed more than 1,500 workers in its construction and development phase.

The new mine is tipped to be a model of excellence to add impetus to the already thriving mining sector. Construction is around shaft two of the former Anglovaal–owned mine, making it easier for the owners to develop it within three years with an initial production capacity of 45,000 copper concentrates per annum.

Vale executive director for exploration, energy and projects EdwardoLedsham and ARM executive chairperson Patrice Motsepe stated that it was not possible to develop a mine in three years but because the area was once operational with an already existing mine shaft, the plan will work out.

Mr Ledsham said that little damage had been caused to the shaft since the last time it was operated in the 1950s which was why it was easy to develop it within three years. On completion, the mine is expected to employ an additional 1,500 people.

The expected mine life is 28 years, including a three-year exploration programme to evaluate area A, which has the potential to increase output to 100,000 tonnes of copper concentrate per year from 2020 onwards.

Initially, the South and East Limb mines would be developed, after which the deeper, higher grade and wider reef areas will be mined.

Vale and ARM expect the development of Konkola North to add significant value to benefit people of Zambia over the medium to long-term.

The project will also enhance Vale’s global copper growth platform, provide geographic diversification into a region with the highest potential for mineral exploration in the world, the Copperbelt, and reinforce South-South cooperation as a cornerstone for the future.

The additional copper output adds to Zambia’s overall target of one million tonnes per annum. Having provided a good platform for mining expansions, the Government has seen various developments from mining companies.

KCM’s KDMP in Chililabombwe was the first biggest development in Chililabombwe that ensured increased employment when the project commenced. With a significant chunk of the $2 billion investment that Vedanta Resources has made in KCM new projects, going to the KDMP, it is no surprise that its employment record stand at more than 20,000 permanent and contract employees.

The KDMP being a flagship project situated in Chililabombwe, it has given way to employment creation for many locals as the mine has sank a 1, 500 meters deep shaft and accompanied by other shafts with service, ventilation and incline/decline shafts.

In the same way, Konkola North Copper Mines has created the same business excitement among entrepreneurs with a promise of significant business growth.

With the jobs already created in the construction stage, it is promising times for the border town and the country at large.

The jobs being created would double and even trebble in a few years time when second and third phases commence that would see further expansion of the mine.

KONNOCO has not only created jobs, it has also given contracts to entrepreneurs for the provision of various goods and services.

Mr Motsepe said that it was important to empower entrepreneurs with business and mining skills that would enable them venture outside Zambia and invest in other countries.

Mr Motsepe said it was not just about the country bringing in foreign investment but that local business should participate in technology transfer.

President Rupiah Banda, who launched the project last Thursday, stressed the importance of prioritising local contractors and suppliers in doing business.

Mr Banda was concerned that locals had continued to be used as mere agents in the supply chain but that his desire was that foreign suppliers partnered with locals to establish production lines within the country.

This would not only cut costs of doing business for the mine but that it would also create the much needed employment in the country.

Mr Banda said his Government had played its role in providing an environment that would make investment rewarding while ensuring that people benefitted from such investments.

“Today, our country is beginning to see the benefits of our privatisation programme. Total employment levels in the mining industry now stand at 50,000 compared to fewer than 30,000 at privatisation of ZCCM,” he said.

The president stated that he had officially opened five mines since he took office and this was only to indicate that despite Government programmes for diversification to other economic activities other than mining, it was still important to support the industry.

Mining remains the biggest contributor to Zambia’s Gross Domestic Product (GDP).
For KONNOCO, it is a situation of economic benefit all around from the onset of the project but more importantly, it would create extra business for other mining companies which would buy the copper concentrate for refining into finished copper.

It also goes without saying that Vale’s position as a partner in the development of the Nacala corridor, would increase the potential for an easier link between the region’s interior and the Port of Nacala in Mozambique.

With the difficulties of transporting the copper through Tanzania’s port, Nacala is a possible alternative for transportation. It all works well with the development of the one-stop border facility at Kasumbalesa with the Democratic Republic of Congo (DRC) because the facility also promises to employ more than 1,000 workers on completion.

It would also ensure quick transactions for transit goods but ultimately, it is the increased economic activity that would be brought about by construction of modern markets, hotels and other amenities at the site.

All these developments simply reflect on the amount of revenue that local and central government hope to collect.