BHP Copper, a subsidiary of
Details were not available at presstime, though Tenke Mining did state that the option, if exercised, would entitle BHP to acquire most of Tenke’s 55% stake in the project in exchange for providing unspecified development funds. The Congolese state mining agency Generale des Carrieres et des Mines (Gecamines) owns the remaining 45% interest in the project.
A near-complete feasibility study of the Tenke Fungurume deposits envisages the mining of an initial 85 million tonnes of oxide ore with an average extraction grade of 3.19% copper and 0.29% cobalt. The concession’s global resource is 520 million tonnes grading 3.6% copper and 0.28% cobalt, and there is said to be significant exploration potential.
If the Congo’s chaotic political situation stabilizes enough to allow the project to proceed, Tenke Fungurume will rank among the world’s largest and lowest-cost copper-cobalt mines, with production costs estimated at just US6 cents per lb. copper, using a cobalt credit of US$10 per lb.
The cost of building the project is estimated at US$475 million, including owners’ costs, preproduction and contingency. Mining and processing methods would be conventional, and the deposits are believed to possess a relatively simple metallurgy.
Annual copper production is expected to be 100,000 tonnes in the first fours years, rising to 200,000 tonnes in the following 16 years. Annual byproduct cobalt production would be in the 6,000-to-13,000-tonne range.
Under a previous agreement with Gecamines, Tenke Mining must make a US$200-million payment by May 2003, though the company’s June 1998 deadline to secure financing was extended by the agency, which recently installed Zimbabwean businessman William Rautenbach as chairman.
For BHP Copper, the Tenke deal represents a step forward in its goal to develop a major copper mine in Africa. The subsidiary’s other large copper projects include: the Ok Tedi mine in Papua New Guinea; the Escondida mine in Chile; the Tintaya mine in Peru; three mines in Arizona; and the Agua Rica project in Argentina.
Currently, BHP’s only large mining project in Africa is BHP World Minerals’ A$390-million Hartley platinum project in Zimbabwe, which will soon be producing, on an annual basis, 150,000 oz. platinum, 110,000 oz. palladium, 11,500 oz. rhodium and 23,000 oz. gold.
Tenke Mining underwent several administrative changes over the summer and fall. Chairman Adolf Lundin has replaced Philip Wright as president, though the latter will carry on both as a director and as a project manager.
Tenke has also changed its fiscal year-end to Dec. 31 from Sept. 30. For the year ended Sept. 30, 1998, the company recorded a net loss of US$4 million (6 cents per share) on revenue of US$1.4 million, most of which was interest income. The loss was primarily due to a US$3.4-million writeoff of oil-and-gas interests. In the previous fiscal year, Tenke earned US$341,000 (1 cents per share) on revenue of US$3.1 million.
At Sept. 30, Tenke’s deficit was US$26 million and its cash and short-term deposits totalled US$614,000. The company has attributed a value of US$201 million to its total assets.
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