First Quantum ups Bwana Mkubwa output

Better head grades have enabled First Quantum Minerals (FM-T) to boost copper production at its Bwana Mkubwa solvent extraction-electrowinning operation in Zambia.

During the six months ended June 30, the mine cranked out 11.1 million lbs. copper cathode and 29,029 tonnes surplus acid at an average total cost of US57 per lb., compared with 9.7 million lbs. and 31,257 tonnes acid at US76 per lb. in the corresponding period a year ago. Only 410 more tonnes of ore were processed in the recent period; however, the average copper grade was 3% higher, at 73%.

Production in the three months ended June 30 topped 5.7 million lbs. copper cathode, plus 17,835 tonnes of surplus acid, at a total cost of US50 per lb.; this compares with 4.9 million lbs. copper cathode and 14,244 tonnes surplus acid at US77 per lb. in the second quarter of 1999.

First Quantum commissioned Bwana Mkuba in early 1998. More recently, in partnership with Glencore International, the company added to its African holdings by purchasing the Mufulira and Nkana operations, also in Zambia’s copper belt.

At the end of March, the new venture paid US$20 million for 90% interests in both mines, and it will pay an additional US$115 million in equal annual payments between 2003 and 2007. Glencore loaned First Quantum its share of the initial payment, repayable in 13 months, in exchange for 1.5 million warrants that are exercisable at $3.75 per share. Zambia Consolidated Copper Mines, the former owner, retains a 5% free and 5% repayable carried interest.

Resources at Nkana stand at 332 million tonnes grading 2.21% copper and 0.1% cobalt, including reserves of 76 million tonnes grading 2.26% copper and 0.14% cobalt. The Mufulira mine hosts 71 million tonnes grading 3.1% copper, including reserves of 29 million tonnes grading 3.02% copper.

The partners will spend US$159 million over the next three years. Also, Glencore is providing a US$25-million working capital facility, as well as a US$15-million standby facility. Production updates for both mines are expected shortly.

Meanwhile, in Zimbabwe, the Connemara open-pit heap-leach mine produced 10,400 oz. at US$334 per oz. in the first six months of 2000, compared with 8,411 oz. at US$302 per oz. in the first half of 1999. First Quantum attributes the higher costs to inflationary pressures and supply shortages caused by political and economic instability.