Namibia’s sole copper mine recovering

Ongopolo was recently acquired by London Stock Exchange-listed Weatherly International (WTI) mid this year, raising prospects for the copper mine which had been plagued by years of under-capitalisation.

The new investors have already poured into the mine more than US$20 million in capital expenditure (Capex).

Ongopolo owns Otjihase, Matchless and Asis Far West copper mines and a copper refining smelter at Tsumeb in the northern parts of Namibia.

WTI announced last week in a statement that the Tsumeb smelter is back online after refurbishment of its number one furnace ahead of schedule.

The final refurbishment is expected to raise the smelter’s production to its full capacity of 30 000 tonnes of copper annually, WTI said in a statement. The mining firm also said that it had signed new contracts to provide supplies of copper concentrates for the smelter to beef up concentrates from Ongopolo mines in Namibia and WTI’s exploration interests in Zambia.

“We are delighted to bring the furnace back into action ahead of schedule and look forward to building towards fully capacity during 2007 both with our own copper concentrates and those from our new suppliers in the Democratic Republic of Congo (DRC), Namibia and Zambia,” WTI chief executive Rod Webster said.

WTI, which took over Ongopolo’s operations in July this year, said it had sunk US$2.8 million into the Tsumeb smelter upgrade, which started smelting copper concentrates ahead of schedule, producing its first blister copper on the first week of September. Webster also said that Ongopolo is eyeing a second furnace which has a capacity of 80 000 tonnes of copper per annum.

The firm has moved into the region to toll refine copper from the vast and mineral-rich DRC and augment copper produced in Namibia.

Ongopolo said it is going to purchase 2 000 tonnes of copper concentrates per month from the DRC and has partnered up with South African investors to set up a trading company BAM International Export (Namibia) and Solar Spectrum Trading (South Africa) to help expedite the process.

Ongopolo said that it would further toll treat 3 700 tonnes of copper concentrates per month from the DRC and Zambia under arrangements with Republic House, a United Kingdom firm.

“These supply contracts will augment Ongopolo’s own mine production from the two Windhoek area mines, Otjihase and Matchless, where monthly production is expected to increase from current levels to around 500 tonnes a month by December 2006 as changes being implemented start to take effect,” Ongopolo said. In August the firm also announced that it was raising 3.7 million pounds to fund the Kombat and Tsumeb mining projects.

But it is in Zambia where the growth of the copper mining firm is expected to come from.

WTI took over the Luanshya copper deposits in Zambia, which is estimated to have up to 1.4 million tonnes of copper deposits. WTI said that its immediate focus is to progress the Luanshya copper project to the development stage aimed at bringing the mine into full-scale production by 2008.

The company estimates that the Luanshya copper mine could produce up to 60 000 tonnes of copper annually. Copper prices on the international market have remained bullish due to soaring demand from the world’s fastest growing and fourth largest economy, China.

Prices have fallen by 15 percent since hitting a peak of US$8.800 per tonne in May but analysts say that they are still up 70 percent from the start of the year as soaring demand, especially from China, record low stocks and nagging supply worries spurred relentless fund buying.

In the region, copper producers such as Zambia announced that production of the metal would next year be back to the heyday 1970s with an estimated production of 700 000 tonnes at the end of 2007 when the new Lumwana copper mine would be brought on stream.

“The Zambian mining industry nearly suffered paralysis in January 2002 when Anglo American Corporation, then a lynchpin of the business, announced that it would abort its operations at Konkola Copper Mines plc. At that time, that decision had a devastating impact on the mining sector but I am glad to say that, as a result of attractive incentives being offered by our government, the situation has been reversed,” Zambia’s mining permanent secretary Lennard Nkhata told delegates at a conference, dubbed “Africa Down-Under”, in Perth, Australia, two weeks ago.

September 2006
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