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Mar 14 Juin 2011 18:02
First Quantum May Spend $900 Million on Zambia Copper Output
(Updates with spending breakdown in second paragraph.)
June 14 (Bloomberg) -- First Quantum Minerals Ltd.’s Kansanshi Mining Plc, which operates Africa’s largest copper mine in Zambia, may spend about $900 million increasing production over the next three-to-four years as prices climb.
The sum includes a $370 million expansion underway to boost output to 400,000 metric tons by 2015 from an estimated 259,000 tons this year, Sean Whittome, Kansanshi’s general manager, said today in an interview at the site near Solwezi in the country’s northwest. A proposal to build a smelter at a cost of about $500 million may go before the company’s board in October, he said.
First Quantum plans to spend about $1 billion building a mine at its Trident project at Kalumbila, west of Kansanshi on the country’s so-called copperbelt, the richest source for the metal in Zambia, which is Africa’s largest producer.
Rivals including Vedanta Resources Plc’s Konkola Copper Mines and Glencore International Plc’s Mopani mine are also expanding output as prices for the metal, used in wiring and pipes, gains.
Copper gained 36 percent in London in the past year as China, the biggest copper consumer, lead increased demand from Asian nations.
Zambia plans to more than double production to two million tons of copper by 2015. Rising output in Zambia, as well as the U.S., Chile and Canada will probably boost global output 8 percent through 2013, Patricia Mohr, a commodity market specialist at Scotia Capital, said on June 8.
Paying for Processing
The proposed smelter may process about 1.2 million tons of concentrate, yielding about 400,000 tons of copper, Whittome said. Kansanshi currently pays rivals to process some of its concentrate.
Kansanshi, bought by First Quantum from Phelps Dodge 10 years ago, is doing “aggressive” exploration that will likely prove the mine can produce for more than 20 years, compared with the current projection of 13 years, mine manager Meiring Burger told reporters at the site today. The company is using 18 drill rigs, he said.
“By the end of next year, there will probably be significantly more that 20 years,” Burger told reporters. Zambia’s state-owned ZCCM Investment Holdings owns 20 percent of Kansanshi, which also produces gold, and First Quantum the rest.