Katanga wants to be Africa’s biggest copper producer

Katanga Mining (KAT-T) is gearing up to take a big copper project, and make it that much bigger.

The copper miner with operations in the Democratic Republic of the Congo’s world-class copper belt updated the market on its expansion plans for Phase 4 development at the mine complex.

Katanga says it wants to turn-out another 100,000 tonnes of copper per year via a solvent extraction (SX) plant. That amount is over and above the additional 200,000 tonnes per annum SX plant it outlined in a technical report from last year.

The plant will be built in front of the existing Luilu electro-winning plant, and just a day earlier, on March 29, Katanga announced it had closed a deal to secure the additional power supply the larger processing facility would require.

But the plant isn’t only about to get bigger than previously imagined, but it will also reach higher copper and cobalt production levels quicker than what the company had originally said. Of course quicker and more production comes at a cost, and Katanga says capex will be $98 million more than originally conceived.

The bulk of that extra cost is due to the SX plant and an in-pit crusher at the KOV Open Pit.

And while the increase in output should bring copper production at the site to 270,000 tonnes per year of grade A copper Katanga doesn’t plan to stop there.

Once the initial boost to production brings about at corresponding increase in cashflows, the organically generated capital will go right back into bolstering the site even further, with an ultimate production goal of 310,000 tonnes per year.

Feeding those grand visions of production will be five different deposits: Kamoto, T-17, Mashamba East, KOV, Kananga and Tilwezembe.

On March 23 the company issued a resource update on the deposits.

Proven and probable reserves from four of the five deposits totaled 96 million tonnes grading 4.21% copper and 0.47% cobalt, while measured and indicated resources came in at 288.6 million tonnes grading 4% copper and 0.46% cobalt. Inferred resources stand at 169.1 million tonnes grading 2.42% copper and 0.31% cobalt. Both measured, indicated and inferred tonnage are inclusive of all five deposits.

And while that resource update showed a decline in total resources of 9.9 million tonnes, the key take-away from the update was that reserves only decreased by 1 million tonnes despite 4.5 million tonnes being mined in 2011.

Katanga said it was able to make up most of the mined ore through better technical designs at both the KOV open pit and at the T-17 underground. A new extension to the T-17 open pit also made a contribution.

In Toronto on March 30 Katanga shares were up 2% or 2¢ to $1.05 on 691,000 shares traded. The company’s share price has ranged between 88¢ and $2.18 over the last 52-week period and it has 1.91 billion shares outstanding.