Lumwana Mine
Submitted on: 09 Apr 09
Website Address: http://inzambia.com
Category: Natural Resources
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(3 votes, average: 4.67 out of 5)
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The Company’s optimized development plan is based on the published (June 2008 Technical Report) ‘Development Case’ which provides a mining schedule that contains 45% Measured and Indicated Resources and 55% Inferred Resources to be mined over a 37 year life-of-mine (‘LOM’) on the basis of processing 20 million tones per year of ore to produce copper concentrates for shipment to local smelters.
LOM (37 years) annual production will average 156,000 tonnes (340 million lbs) of copper metal, with over 172,000 tonnes (380 million lbs) being produced per year during the initial 6 year period.
Total life of project Operating Cash Costs under the Development Case are expected to be US$0.82 per pound or US$0.76 per pound of copper produced, inclusive of uranium credits.
In addition, Lumwana hosts a Probable Uranium Resource containing 16 million pounds of U3O8 or 13 million pounds within the designed copper pits. A feasibility study has been completed which shows that it is economically viable to treat the uranium mineralisation onsite.
Project Location
Located in the North Western Province of Zambia, 220 km west of the Copperbelt and 65 km west of the town of Solwezi, Lumwana is easily accessed by the Northwest Highway.
The Copperbelt, one of the world’s greatest concentrations of copper cobalt deposits, has been a centre of commercial copper production for 80 years.
Mining License
The Lumwana Large Scale Mining License, LML-49, covers 1,355 km2, and includes two major copper deposits, Malundwe and Chimiwungo, and 25 exploration prospects. Equinox owns 100% of LML-49.
Infrastructure
The Northwest Highway, which links the Lumwana region, Solwezi and the Copperbelt, passes within 3 km of the project.
ZESCO, the Zambian national power generating and distributing company has completed the construction of its 330kV power line extension from Solwezi to the Lumwana substation. Equinox has a long-term (15 year) power supply offtake agreement with ZESCO.
Mine Plan
The Company’s optimized mine plan is based on the ‘Development Case’ which contemplates a mining schedule that contains 45% Measured and Indicated Resources and 55% Inferred Resources to be mined over a 37 year mine life on the basis of processing 20 million tones per year of ore at an average strip ratio of 4.2:1.
The Development Case mine plan 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 are being employed utilizing equipment that includes a total of 27 x 240 tonne capacity diesel-electric drive hybrid haulage trucks and 7 x 518 tonne diesel and electric loaders (excavators and face shovels).
Sulphide ore will be processed on-site by conventional crushing, grinding and flotation to produce copper concentrates for shipment to offsite smelters. Metallurgical test work indicates recoveries of greater than 95% copper, producing average concentrate grades of 43.3% Cu for Malundwe and 29.5% Cu for Chimiwungo. The flotation plant has a design capacity to treat at least 20 million tonnes per year of ore and will, in the first 6 year period, produce in concentrate 172,000 tonnes of copper metal per year (380 million lbs per year).
Life of mine production will average 156,000 tonnes of copper metal per year (340 million lbs year) based on the 20 million tonnes per year throughput.
Concentrate Offtake
During 2007 Equinox signed off take contracts for 100% of its copper concentrate production for the first 5 years of the mine life.
The first offtake contract is with Chambishi Copper Smelter Limited, a joint venture between China Nonferrous Metal Mining (Group) Co. Ltd. and Yunnan Copper Industry (Group) Co. Ltd. to build a new copper smelter at the Chambishi mine on the Zambian Copperbelt. Equinox will supply this new smelter in a 5-year ‘take and pay’ contract to commence from Lumwana commissioning, with annual commitments to Chambishi of 100,000 tonnes of copper contained in concentrates or approximately 230,000 tonnes of Lumwana concentrates. While the Chambishi smelter will probably not commission until early 2009, the ‘take & pay’ nature of the offtake contract means that Lumwana concentrate will be delivered to the smelter from mine commissioning.
Equinox also signed concentrate sale and purchase agreements with Mopani Copper Mines Plc and Glencore International AG (‘Glencore’) for a total minimum contractual ‘take and pay’ tonnage of 53,000 tonnes of copper contained in concentrates or approximately 120,000 tonnes of Lumwana concentrates annually.
The agreements also grant Glencore a first option right to process further additional annual quantities of Lumwana copper concentrates in excess of the above commitments.
Project Debt and Equity Financing
In December 2006 the Company signed a US$583.8 million senior and subordinated project finance debt facility with a group of financial institutions for the completion of development and construction of Lumwana. The project debt facility is being provided by a syndicate of European, African, Canadian and Australian based Commercial Lenders, Developmental Finance Institutions and Export Credit Agencies. As part of this facility, the Company also established a US$45 million contingent funding credit facility to be used should cost overruns occur or for corporate purposes post project completion.
Equinox completed an equity offering in early 2007 for gross proceeds of Cdn$211.25 million (US$179 million). This completes a total of US$427 million raised by Equinox since early 2006.
Following satisfaction of all conditions precedent Equinox successfully achieved financial close on its US$583.8 million Lumwana Project finance debt facility in August 2007 and drawdowns are well underway.
Lumwana Construction
Project construction commenced in early 2006. With construction largely complete, remediation of works following the transformer fire incident underway and commission continuing, full production will be reached in 2009. Other highlights include:
* Large scale mining commenced in April 2007 at the Malundwe pit and has now reached the primary ore body;
* Machine assembly and handover of mining equipment proceeding largely on schedule with 16 Hitachi EH4500 haul trucks now commissioned and all parts for the remaining 11 haul trucks on site. Two Hitachi EX5500 shovels are now in operation with three shovels being assembled on site
* All process plant equipment is on site and major equipment has been physically installed;
* ZESCO has connected the Lumwana substation to the national electricity grid;
* Lumwana residential township construction is well underway with over 410 houses ready for occupation.
Uranium Feasibility Study and Environmental Impact Assessment
Equinox has completed the Uranium Feasibility Study (‘UFS’) which investigated the onsite treatment of the discrete and high grade uranium mineralization contained within the copper pit shells.
This study reviewed and updated the 2003 uranium study and expanded upon previous testing. Designs and cost estimates, to +/- 15% accuracy, were prepared for the proposed processing plant and associated infrastructure for the production of uranium ‘yellowcake’. The results of the UFS show that it is economically viable to treat the uranium mineralisation onsite.
An Environmental Impact Assessment (‘EIA’) has been prepared as part of the UFS and was lodged in July 2008 with the Environmental Council of Zambia for project approval. The EIA report and appendices are attached below.
Approval of this EIA by the Environmental Council of Zambia is required for uranium plant permitting. Furthermore, the Government of the Republic of Zambia is enacting legislation for the processing and export of uranium, consistent with International Atomic Energy Agency guidelines. It is anticipated that both the permitting and revised legislation will be completed in Q4-2008.
I would like to learn more about the lumwana project, would you possibly provide me with technical report
is the lumwana mine closed or still operating
lumwana should support the creation of small to medium scale companies inolved in adding value to their produce. this would create further revenue and employment in the country.
it would be more economical to export finnished products.
I would like to know more about Lumwana and the departments that it has.