New mine opens on the copperbelt
By Nawa Mutumweno – The new Konkola North copper mine has opened in Chililabombwe on the Zambian Copperbelt with an investment of $380 million.
The mine is owned by Konnoco, a joint venture (JV) between South Africa’s African Rainbow Minerals (ARM) and Brazilian mining giant, Vale. It was inaugurated by President Rupiah Banda recently, the fifth mine he has opened since taking office in 2008.
On completion in two years time, the mine is expected to produce 45 000 tonnes of copper per annum, contributing to a nationwide copper output target of one million tonnes by 2013. The project will create 1 500 jobs in the construction phase and 1 500 more when fully operational. This is in addition to jobs created through supplying goods and services to the mine.
During the ground-breaking ceremony at the site where the mine would be constructed, ARM executive chairman Patrice Motsepe said $400 million will be spent during the first phase.
“To reach full capacity, the project will require about $1 billion and the expected mine life is 28 years, including a three year exploration programme to evaluate area A, which has the potential to increase output to 100 000 tonnes per annum of copper in concentrate from 2020 onwards. Initially, the south and east limb mines will be developed, after which the deeper, higher grade and wider reef areas will be mined, “ Motsepe disclosed.
“I congratulate the people of Chililabombwe and join them in looking forward to the development and prosperity that this new mine will bring to the area. I also congratulate ARM and Vale in continuing the exploration of Konkola North ore deposits in order to establish a commercially viable mining operation,” President Banda enthused.
Over 20 000 new mining jobs have been created in the country since the advent of privatization. This is bound to increase in the long run given the widespread new mineral exploration works being carried out across the country to diversify the mining sector and the series of new mines coming on stream.
The vision of Government is to have a vibrant and well-organised mining industry contributing in excess of 20 percent of the gross domestic product (GDP) and providing a level of employment that will significantly move the country forward in terms of poverty reduction in the next five years.
And chief executive officer for Konkola North David Armstrong disclosed that the firm will produce in excess of 2.5 million tonnes of copper per year when the mine starts full scale copper production in 2013.
Vale CEO Roger Anglli said his firm would invest over $1 billion into the mining operation in the next five years. The money would be spent on infrastructure development and construction of the mine. The company is also interested in contributing to other sectors of the economy such as bio-fuels. It would also pay special attention to environmental concerns.
Konkola North mine has been dormant for over 50 years.
Meanwhile, Vale has come under scathing attack over its human rights record in operations around the world with the Mine Workers’ Union of Zambia (MUZ) hurling arrows of criticism at it over unfavourable treatment of workers in Canada, a developed economy. The Union contends that that record would even become worse in a Third World country like Zambia.
However, Vale has defended its human rights record saying the Canada scenario occurred under a unique circumstance and that the company should not be negatively viewed solely over it.
And Zambia Consolidated Copper Mines Investments Holdings (ZCCM-IH) urged the owners of Konkola North Copper mine to ensure that it was developed within the proposed time framework.
ZCCM-IH chairperson Alfred Lungu expressed concern over the length of time it had taken to get the project to the current level and the numerous delays that beset the project’s feasibility study.
“We are, however, pleased that the project has taken off,” he said.
ZCCM-IH will acquire 20% shareholding in Konnoco. It retained the option to take either 15 or 20 percent equity interest under the mining rights agreement.
“We have elected to acquire 20% shareholding in Konnoco with five percent being free-carried interest and the remaining 15% will be financed at a cost of about $50 million,” said Lungu.
