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Lun 20 Juin 2011 07:33
Konkola North seeks to spend USD 450 million to prepare mine
Monday, 20 Jun 2011
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Kononoco Zambia, a unit of Teal Exploration and Mining Incorporated may invest USD 450 million into the revival of operations Konkola Copper Mine in northern Zambia where the company forecast to mine 45,000 tonnes of finished copper per annum.
Recently Konkola mine said that it had completed a bankable feasibility study to finalize the work needed to revitalize operations at one of the country’s oldest mines. The company envisions realizing 45,000 tonnes of refined copper per annum and increase further during the projected than 28 years lifespan.
Mr David Armstrong MD of Kononoco said during the just ended mining and energy conference in Lusaka that the company has stepped up drilling and other mining related work to ensure the mine was ready and commissioned in two years time. There are acquisition opportunities in Angola and Zimbabwe.
Mr Armstrong said that “We are looking at investing not less than USD 450 million in the next 18 months to ensure that the mine was up and ready for final work. We have realized the potential and we want to work according to schedule.”
Last year during the ground breaking ceremony at the mine by Zambian president Mr Rupiah Banda Konnocco stated its plans to invest USD 1 billion in the next 5 years to fully develop the Konkola North Copper Mines in Chillilabombwe. Mr Banda has challenged mining investors in the country to ensure further investments in the industry in order to avoid the Chilean experience where 33 miners were trapped underground for 69 days.
At the same occasion, Zambia Consolidated Copper Mines Investment Holdings said it planned to retain 15 per cent shareholding in the Konkola North Copper Mines at a total cost of USD 50 million.
Mr Patrice Motsepe executive chairman of Konnocco stated that it will construct with start up production expected by 2013. An estimated US USD 400 million will be spent during the Phase I that will result in producing 45,000 tonnes annually of copper in concentrate that would be smelted in Zambia.
Mr Motsepe said that to reach full capacity, the project will require about USD 1 billion and the expected mine life is 28 years, including a three year exploration program to evaluate area A, which has the potential to increase output to 100,000 tonnes per annum of copper in concentrate from 2020 onwards. Initially, the south and east limb mines will be developed, after which the deeper, higher grade and wider reef areas will be mined.
He added that the company’s investment in the project will be leveraged by Vale’s extensive track record in developing successful large scale mining projects in tropical environments and the project development is consistent with our goal to become one of the largest copper producers in the world and it is expected to create significant shareholder value and immense opportunities to the local communities.
Mr Motsepe stated that the company planned to train and transfer skills to Zambians at all levels and sought to contribute to entrepreneurs through the goods and services that we shall buy when executing this project.
Mr Roger Agnelli CEO of Vale said that the company would take care of the environment since it helps to avoid liabilities in the future. Everything at Konnoco will change and we are looking at creating opportunities for people like we have done in the Amazon basin and Tete region of Mozambique where we have developed projects with full support of the communities and we really care about the environment because if we don’t pay the bill today we shall still pay in future and that might be costly.
At the same occasion, President Mr Banda regretted the obsolete equipment in some mines that results in practicing unsafe operations and that Zambia needed investors to transform the country’s resources to attain development. He assured Konnocco of his government’s provision of stability and predictability to the mining industry.
Mr Alfred Lungu chairman of ZCCM IH said that the defunct ZCCM retained the option to take up either 15% or 20% equity interest under the mining rights agreement Konkola north was sold to Konnoco. We have elected to acquire 20 per cent shareholding in Konnoco with 5% being free carried interest and the remaining 15% will be financed at a cost of about USD 50 million.