Private-sector mine represents Quantum leap for Zambia

In Zambia, construction has begun on the country’s first private-sector copper mine in 25 years.

The Bwana Mkubwa project, a former producer now owned by First Quantum Ventures (FQV-V), comprises 5,800 ha in the country’s copper belt.

The first structure to be erected is a plant which will be used to recover and treat 8.4 million tonnes of tailings with a grade of 0.726% copper. Those tailings were left behind by state-owned Zambia Consolidated Copper Mines, which operated a mine from 1971 to 1984.

A feasibility study has concluded that the quantity and grade of the tailings are such that First Quantum can carry out a profitable heap-leach, solvent extraction-electrowinning facility with its own sulphuric acid plant. Copper recovery at such a facility is estimated at 81.4%.

Operating profit for the first five years is estimated at US$133 million. The plant will take 14 months to build and is expected to treat, on an annual basis, 9,720 tonnes of cathode copper, 234 tonnes of rough copper and 60,000 tonnes of sulphuric acid.

Production is set to begin in the first quarter of 1998. Bwana Mkubwa has an internal rate of return of 58%, based on a capital expenditure of US$25.6 million and a copper price of US$1 per lb.

Investitec Bank of Johannesburg, South Africa, will provide up to US$23.8 million in financing. That, along with a previously announced equity financing of $21 million, will give First Quantum access to more than $50 million for exploration and the development of Bwana Mkubwa.

The licence covers the Bwana Mkubwa open-pit mine, which has operated sporadically since 1903, as well as ground that

the Vancouver-based company plans to explore in early 1997.

The licence for the project is valid until April 2006 and is the first to be issued under Zambia’s new Mines and Mineral Act. The government plans to privatize up to 70% of the country’s state-owned businesses by the end of next year.

First Quantum is one of 33 international mining companies that have qualified to bid for majority interests in three state-owned copper mines.

Resolute Samantha, an Australian gold producer and precious metals explorer, has bid jointly with Quantum for the Luanshya division (excluding the Ndola precious metals plant), the Chambishi copper mine and the Kansanshi project, but has since backed out.

“We’re going to bid for 100% [of those projects] or find another partner,” says Keith Neumeyr, vice-president of Quantum.

The Luanshya division includes two producers, one of which, the Luanshya mine, processed 1.41 million tonnes grading 1.53% copper (with a recovery rate of 94.43% copper) last year, while the other, the Baluba mine, processed 1.5 million tonnes grading 1.82% copper and 0.15% cobalt (with recovery rates of 94.05% copper and 57.03% cobalt).

Reserves at Luanshya stand at 23.3 million tonnes grading 2.32% copper, whereas Baluba is estimated to host 32.5 million tonnes of 2.48% copper and 0.17% cobalt.

The Chambishi copper mine, which has been dormant since 1987, is estimated to host 33.4 million tonnes of 2.55% copper. Recovery rates of 90% copper from open-pit ore and 94% from underground material have been recorded.

The Kansanshi project, which has a resource of 24.4 million tonnes grading 3.04% copper, requires additional drilling before a feasibility study can be undertaken.