First Quantum to double output at Zambian mine

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ALLAN SECCOMBE
Published: 2011/06/20 07:31:42 AM

CANADA’s First Quantum Minerals will entrench its position as the largest copper miner in Zambia as it nearly doubles production and builds a new smelter in a $900m project at its Kansanshi mine, which remains the main source of tax revenue for the government.

It will become a significant gold producer too, with output expected to rise 65% by 2015 from this year’s forecast of 120000oz, Sean Whittome, Kansanshi’s GM, said last week.

First Quantum sends its gold to Rand Refinery in Germiston for refining.

It will complete 150000m of exploration drilling on its Kansanshi property near Solwezi in northern Zambia by the end of next year as it pushes output at the mine to 400000 tons of copper a year from 230000 tons last year.

The current life of the mine, including inferred resources, is 20 years. "By the end of 2012 it will be significantly more than 20 years," mine manager Meiring Burger said last week.

Not only is First Quantum the largest copper producer in Zambia, it is also the biggest taxpayer and it is thought it will contribute a fifth of the government’s revenue this year.

Kansanshi has paid more than 5- trillion kwacha ($1bn) in taxes and royalties between 2006 and last year. By the end of this month it will have paid 2- trillion kwacha ($400m) more.

A new smelter would be built at Kansanshi to treat 1,2-million tons of concentrate to provide a vital source of cheap sulphuric acid that would allow it to combine two separate processing streams and bump up recoveries, Mr Whittome said.

About 11% of Kansanshi’s costs are for acid. Kansanshi has a complex ore body that yields oxide and sulphide ores and a mix of the two. The plant has three production streams to cope with each type .

The smelter, which will decrease Kansanshi’s reliance on other firms to treat its concentrate, will supply 3500 tons of sulphuric acid a day, allowing for the combination of the oxide and "mix" ores, boosting recoveries.

First Quantum is in international arbitration over the Democratic Republic of Congo’s decision to revoke rights to two projects worth about $1bn. It is also awaiting environmental approval from Zambian authorities to start its $1bn Trident project 120km from Kansanshi.

Trident will feed the Kansanshi smelter, the fourth in Zambia, and will treat 1,2-million tons of concentrate. The two mines would deliver about 1,5-million tons of concentrate a year, so First Quantum would need to continue with "some" toll treatment, Mr Whittome said.

First Quantum will build three opencast mines at Trident, which will produce 300000 tons a year of copper after an initial output of 150000 tons a year.

Meanwhile, Copperbelt Energy , the princip al supplier of electricity to mines in the copper-rich area of northwestern Zambia, is investigating a 500MW hydroelectric project on the Luapule River bordering the Congo.

The $1,5bn project, if it goes ahead, will not only supply much-needed power to the Copperbelt, but could also open up manganese mining in northeastern Zambia, where exploration is under way. There is small-scale mining by about 40 operators , but the government is anxious to see major players becoming involved .