Crew Development picks up Zambian copper-cobalt mine

The Canadian-South African Consortium, in which Crew Development (CRU-T) holds a 48% direct and indirect interest, has acquired the Chibuluma copper-cobalt project from state-owned Zambia Consolidated Copper Mines (ZCCM).

The project comprises two deposits — Chibuluma West, a producing mine which generates annual profits of about US$5 million, and a thoroughly drill-tested reserve known as Chibuluma South, situated 12 km away.

To finance the acquisition, Crew has arranged a $10-million private placement. The company notes that all consortium members have now secured their cash requirements to fund their respective interests.

The consortium was awarded the copper-cobalt project as part of the partial privatization of ZCCM. Metorex, the South African operating arm of Crew, will operate the project.

The consortium is required to pay US$17.5 million in cash to ZCCM, as well as a portion of the profits derived from cobalt production. It must also spend about US$34 million over five years in an effort to develop the Chibuluma South body.

Chibuluma West is 12 km west of the Nkana smelting-refinery complex in Kitwe, and is the second most profitable mine in Zambia. Annual production stands at 9,500 tons of copper and 200 tons of cobalt. Although the mine was developed in the 1950s, it still contains proven minable reserves of 1.5 million tons grading 3.63% copper and 0.13% cobalt, sufficient for four more years of mining at current prices. Crew says the reserves could potentially be expanded.

Chibuluma West operates at 35,000 tons per month. The ore is treated at the Nkana concentrator, where a final cathode copper product is produced on a contractual basis.

Chibuluma South is a sulphide reserve of 6 million tons grading 4.35% copper, with additional oxide reserves of some 2.4 million tons, grading in excess of 3% copper. The deposit has been defined by extensive drilling, sampling and geophysical programs, and is anticipated to be readily minable and to present few difficulties with regard to concentrating, smelting, refining and marketing.

Ore will be subjected to a single flotation process. The concentrate grade has been estimated at 46% copper with insignificant cobalt values.

Development of the Chibuluma South mine will begin upon completion of engineering studies, with the objective of reaching production in three years. The mine will be designed to operate at 40,000 tons per month and is expected to produce some 16,500 tons of copper per year.

Chibuluma South, which will be the first mine to open in Zambia in 20 years, will be brought into production prior to the closure of Chibuluma West, thereby enabling continuity of employment and optimal use of the assets and infrastructure of Chibuluma West.