AMF, Gecamines continue partnership

The presence of Laurent Kabila’s forces has brought stability to this mineral-rich portion of Central Africa. It also has brought hope that better days are ahead for an economically devastated nation whose wealth had been plundered for decades by the notoriously corrupt dictator, Mobutu Sese Seko.

North American companies with mineral projects in the country are welcoming the liberation of the people of Zaire by President Kabila and the Alliance of Democratic Forces for the Liberation of Congo-Zaire. Most believe their agreements will be honored, as Kabila is seeking foreign investment to develop the natural resources that will be the cornerstone for the return of economic stability.

During a recent visit to the dormant Kipushi zinc mine near Lubumbashi, officials of America Mineral Fields (AMZ-T) said they intend to help the new government create jobs and prosperity by rehabilitating and developing several mineral projects in the country.

“Our outlook is optimistic and we like what Kabila has said [about investment],” said company spokesman Earl Young, adding that the new government’s policy of appealing to investors to contribute to social development is not a deterrent. “It is an in-house philosophy for us. We recognize that we have a social responsibility in this part of the world.” The Arkansas-based company is evaluating plans to revive the Kipushi mine and related processing facilities as a joint-Venture with state-owned Gecamines.

It also has secured rights to reprocess the Kolwezi tailings, which are estimated at 107 million tonnes grading 1.34% copper and 0.26% cobalt, as well as rights to explore a large package of land in the eastern section of the copper belt.

“Kipushi is important strategically with regard to our plans here,” said Young. “Byproduct sulphuric acid from Kipushi will be needed for the processing of the Kolwezi tailings. And acid is expensive and in short supply in this part of the world.”

Kipushi was put into production in 1925 by Union Minire of Belgium, which operated the mine until it was nationalized by the Zairian government in 1967. Gecamines ran the mine until 1993, when it was not able to obtain funds to purchase spare parts for the underground mining fleet.

Kipushi’s decline mirrors that of Gecamines, which is currently operating at one-Tenth of its capacity as a result of government interference and mismanagement. Since taking control of the copper belt, however, Kabila has replaced Mobutu’s appointees with a technically oriented management team.

Sources say this management transition was brought about because Gecamines’ engineers refused to carry out the orders of Mobutu’s henchmen to destroy the mines, dams and powerlines in the copper belt. What is certain, however, is that Gecamines officials clearly welcome the opportunity to place projects such as Kipushi back into production.

“The arrival of America Mineral Fields is good news for us,” said Mr. Bangou, a former manager of Kipushi who recently was made a regional manager of Gecamines. “This mine still has many years of life, and all that is needed is capital.”

The initial estimate of the capital costs required to resume production at Kipushi is US$30-35 million.

Kipushi is a steeply inclined, hydrothermal polymetallic deposit which is distinct from the stratiform copper-Cobalt deposits that predominate in the Central African copper belt. It has a total resource of 22.6 million tonnes grading 2.1% copper and 13.8% zinc, which includes a proven reserve of 8.8 million tonnes grading 2.7% copper and 12.8% zinc that would allow six years of production with no further capital required.

Prior to mine closure, the lowest production level was at 1,295 metres, with a ramp completed to a depth of 1,330 metres, though the deposit is still open at depth.

In the past, Kipushi ore was treated at metallurgical operations spread over a distance of about 400 km. Zinc and copper concentrates produced on site were sent to a copper smelter at Lubumbashi, the zinc roasting and acid plant at Likasi and the zinc hydrometallurgical plant at Kolwezi.

AMF expects soon to have the results of a prefeasibility study for Kipushi which will include production and capital cost estimates. The study will examine the rehabilitation of the mine itself, the rehabilitation of the concentrator, the possible construction of a smelter and acid plant at Kipushi, and the processing of mine tailings. Kipushi tailings total 25 million tonnes grading 0.35% copper and 2.25% zinc.

Three options are being considered for the construction of the new smelter and acid plant:

* The combination of roast leach and electrowinning would produce sulphuric acid on site, though power costs would be high.

* Sherritt Gordon’s process, which produces elemental sulphur, is being considered, though it would be new technology to the area.

* The third option is the Ausmelt process, which offers the possibility to produce both zinc and copper metal, as well as sulphuric acid, with low power costs.

While Kipushi is not expected to be a low-Cost producer on its own (and capital costs for a new smelter would be considerable), the project is seen as a cornerstone for America Mineral Field’s (AMF) long-Term plans in Central Africa. On an annual basis, the new smelter could process 200,000 tonnes zinc, 30,000 tonnes copper and 400,000 tonnes of byproduct acid production.

Kipushi is believed to be the single largest source of acid in the country, and the amount produced would be more than sufficient to process Kolwezi tailings. Should new deposits be found on AMF’s exploration lands, the excess capacity might prove useful.

AMF only recently secured rights to the potentially lucrative Kolwezi project. Situated in the copper belt, the operation will entail reprocessing the historical oxide tailings that were produced from the copper and cobalt concentrators at Gecamines’ mines in Kolwezi over half a century.

AMF’s tender was based on resource tonnages in three locations; Kingamyambo (60.5 million tonnes), Kasobantu (32.2 million tonnes) and Musomoi Valley (11.8 million tonnes). The company retained a South African engineering firm to prepare the preliminary process and plant designs.

The proposed US$350-Million processing plant was designed to produce at a maximum capacity of 50,000 tonnes copper and 6,000 tonnes of cobalt annually.

The copper will be extracted by solvent extraction-electrowinning, which will be followed by the separate recovery of the cobalt. Under the terms of the tender, AMF is required to prepare a program to carry out a bankable feasibility study under which Gecamines’ data will be verified. While production cost estimates are only back-of-The-envelope at this stage, AMF expects it will be able to produce cobalt at below US$2 per lb. and copper at below 40 cents per lb.

Marius Botha, AMF’s vice-president of metallurgy, believes Kolwezi offers sufficient returns to warrant constructing a new plant. “It is better to do a greenfields project than try to catch up with the environmental requirements that will come down the road later,” he said.

In the meantime, AMF is negotiating to clarify the terms of its exploration permits in the country’s copper belt. The company also has exploration rights in neighboring Zambia.

AMF’s exploration manager Marc Collins expects that field crews will be on the ground shortly to follow up prospects generated from Gecamines’ exploration data base, which includes work carried out over a period of 50 years. The exploration land package includes large areas prospective for copper and cobalt to the south and for gold and tin to the northwest.