Results Kansanshi 2013
Full year operating results
Overall copper production at Kansanshi increased by 4% compared to 2012. Higher throughput realized on the recent plant
expansions and higher mixed ore grade processed was partly offset by lower sulphide ore grade. Ongoing mine pit development
work continues to improve access to various ore types, specifically oxide, to coincide with the current plant expansions.
Sulphide ore production decreased by 2% in 2013 compared to 2012, primarily as a result of lower feed grade, partly offset by
higher throughput. Throughput was higher in 2013 as a result of circuit reconfiguration in 2012 which temporarily decreased the
sulphide circuit capacity. Kansanshi continues to process sulphide from the main pit which is a lower grade area.
Mixed ore production was in line with 2012 as lower throughput was offset by higher ore grade and recoveries. Throughput
exceeded the 6.5 Mtpa design capacity but was lower compared to 2012, when a temporary circuit reconfiguration increased the
capacity of the mixed circuit.
Copper production from the oxide circuit was 9% higher than 2012. Throughput increased reflecting ore characteristics with
incremental increases facilitated by the incorporation of components of the 14.5 Mtpa expansion. Grade and recoveries were in
line with 2012.
Gold production was 23% higher than 2012 as a result of gold circuit enhancements and the re-processing of stockpiled gold
plant tailings.
Cash costs were $0.11 per lb lower compared to 2012 as a result of lower mining and processing costs. These reductions were
mainly attributable to increased gold credit, lower acid costs, savings in solvent extraction and electrowinning combined with
record copper production.
Sales revenues decreased by 7% from 2012 reflecting lower realized copper and gold prices, and a build-up of concentrate
inventory. This decrease flowed into gross profit which was also negatively impacted by higher depreciation charges relating to
plant and mine pit expansions, partially offset by a reduction in cash costs during the year.
Q4 operating results
Overall copper production at Kansanshi was 3% higher compared to Q4 2012, due primarily to higher oxide and mixed ore grade
processed.
in United States dollars, tabular amounts in millions, except where noted
2013 Management’s Discussion and Analysis 7
Sulphide ore production decreased by 8% in Q4 2013 compared to Q4 2012, primarily as a result of lower feed grade, partly
offset by higher throughput.
Mixed ore production increased by 8% compared to Q4 2012 due to higher ore grade, offset partly by lower recoveries.
Copper production from the oxide circuit was 9% higher than Q4 2012 due to higher ore grade, partly offset by lower throughput,
reflecting ore characteristics.
Gold production was 4% lower than Q4 2012 as a result of significantly lower recoveries, offset partly by enhancements in the
gold circuit and the re-processing of stockpiled gold plant tailings.
Unit cash costs were $0.17 per lb lower compared to Q4 2012 as a result of lower mining and processing costs. These reductions
were mainly attributable to lower acid costs and an increase in copper production.
Sales revenues decreased by 11% from Q4 2012 reflecting lower realized copper and gold prices, 13% lower sales of copper
concentrate and a significant build-up of concentrate inventory due to particularly low local Zambian smelter off-take during the
quarter. This decrease flowed into gross profit which was also negatively impacted by higher depreciation charges relating to
plant and mine pit expansions, partially offset by a reduction in cash costs for the quarter.
Outlook
Production in 2014 is expected to be between 255,000 and 270,000 tonnes of copper, and 145,000 and 160,000 ounces of gold.
A strong start to the year is expected, despite the unfavourably wet weather, due to significant gains in mining flexibility and
stockpiles of ore made during 2013.
Acid Plant 5 has attained nameplate production rates after upgrades to the process water treatment system. Trials of technological
enhancements to the water treatment system using non-chemical means will be carried out, with a view to reducing operating cost
and to increase overall effectiveness of water treatment.
The recent commissioning of the leach, solvent extraction and CCD thickener systems of the oxide circuit 14.5 Mtpa expansion
project allows for increased treatment of oxide ore, providing an avenue to flex treatment plans in response to continuing
concentrate smelting constraints locally. Mining plans and schedules are being adapted and the process plant treatment regime is
likely to be changed to allow for increased oxide treatment. The goal of the revision is to facilitate a reduction in concentrate
stockpiled on site and increase production of copper in cathode. Acid constraints remain, however and, as such, full projected
oxide treatment rate is not expected until 2015 when sufficient acid becomes available from the new smelter.
Efforts to reduce concentrate stockpile levels this year will focus on grade improvements, mainly through additional flotation
cleaning capacity, maximized treatment of concentrate through our high pressure leach facility, and changes to the plant feed
composition to favour the production of cathode.
Work on improvements in process control on the oxide treatment route is being expanded, with the goal of improving recovery
and containing costs.
Power supply stability is expected to remain a challenge throughout the year, though some long-awaited ZESCO infrastructure
projects, which will assist in this regard, are expected to come on line during the first half of the year.