Lumwana copper project construction contract go-ahead given
By: Ronald Mwila
Posted: '08-JAN-07 10:00' GMT © Mineweb 1997-2006
LUSAKA (Mineweb.com) --Equinox Minerals Limited has given AIM-listed Bateman Engineering the go-ahead on the engineering, procurement and construction works at the Lumwana copper project in Zambia's North Western Province.
This means that the US $408 million engineering, procurement and construction (EPC) contract between the two parties is now effective, paving the way for the project's completion by June 2008.
In a brief emailed statement of January 8, 2007, Bateman's chief executive officer Dr Sivi Gounden said the Notice To Proceed meant all conditions, including raising project finance, have been met.
Lumwana is one of the largest copper projects to be undertaken in Africa, and is billed start production by end 2008. The project's EPC, as announced on October 17, 2006, would be executed through a joint venture between Bateman and Ausenco Limited. Since January 2006, Bateman and Ausenco have completed over one-third of the front end engineering and design for Lumwana on a reimbursable engineering, procurement and contract management (EPCM) basis, Dr Gounden indicated.
"Similarly, orders for a majority of the major equipment items have been placed and bulk earthworks will soon be finished. Following the receipt of the Notice To Proceed the contract will convert from EPCM to EPC, and the advance work performed will enable Bateman to achieve rapid progress and a relatively high percentage of completion early on.” said Gounden.
The deposit outlined to date is low grade, but large. Measured and Indicated Resources presently total 269 million tonnes averaging 0.8% copper (4.9 billion pounds of contained copper) with additional Inferred Resources totalling 632 million tonnes averaging 0.6% copper (over 8.9 billion pounds of contained copper).
Equinox ’s plan for developing Lumwana envisages that the Malundwe and Chimiwungo deposits, which are 7km apart, will be mined sequentially by open-pit mining methods. The ore bodies are 95% sulphide (with only 5% oxide) and very consistent, so large-scale bulk-mining methods will be employed utilising equipment that includes 240 tonne capacity diesel-AC drive haulage trucks and 26 cubic metre capacity electric face shovels. The mine design forecasts the extraction of 348 million tonnes of ore at an average 3.6:1 strip ratio over a mine life of 17 years.
Sulphide ore will be processed on-site by conventional flotation to produce copper concentrates for shipment to off-site smelters. Metallurgical test work indicates recoveries of greater than 95% copper, producing concentrate grades of 43.3% Cu for Malundwe and 29.5% Cu for Chimiwungo. The flotation plant has a design capacity to treat 20 million tonnes per year of ore and will, in the initial first 5 year period, produce copper, in concentrate, equivalent to 188,000 tonnes of copper metal per year (415 million lbs per year). Life of mine copper metal production will average 150,000 tonnes per year (330 million lbs year).
The Definitive Feasibility Study ('DFS') indicates that the Lumwana life of mine total operating cash costs will be just under US$0.70 per pound of copper produced. During the initial 5 year period, when higher grade material is being mined, total operating cash costs are likely to be just over US$0.63 per pound.
The processing of Lumwana concentrates into copper metal will be conducted at smelters in Zambia, southern Africa or possibly offshore. Negotiations are currently underway with a number of regional smelters, LOI’s having been signed with Palabora Mining Company of South Africa, Ongopolo Mining & Processing Limited of Namibia and Mopani Copper Mines Plc. of Zambia. The LOI’s establish frameworks for the negotiation of the Sales Agreements between the parties.
Lumwana concentrates have the potential to produce by-products including gold, cobalt and sulphuric acid. Also, during the BFS a uranium leach circuit was designed to extract uranium from the uranium mineralization stockpile. Such potential by-product credits have not currently been taken to account in Lumwana economics.
