Ongopolo out of the woods
Ongopolo, whose ownership changed hands in June this year, said that it is eyeing fresh projects, which were previously over-looked such as silver and uranium deposits.
London Stock Exchange listed Weatherly International Plc wrestled a 97 percent stake in the copper miner.
Namibian government owned Government Institutions Pensions Fund and privately owned Bank Windhoek have also muscled in to become the new shareholders in Ongopolo mines.
WTI has extensive copper interests in the Luanshya copper belt in Zambia.
In its results to June 2006, WTI said that Ongopolo was now running debt free and was now valued at US$158 million.
The company said that it is basing the company’s valuation on assumed copper prices of US$5 000 per tonne. Spot prices for copper are currently hovering around US$7 000 per tonne.
“It (Ongopolo) provided us with our first revenues, an impressive range of assets that include one of only four copper smelters in southern and central Africa and several copper and zinc projects that are either in production or development or show strong potential for early future development,” WTI said.
WTI said the recently refurbished Tsumeb smelter processed 2 361 tonnes of copper in September with 832 tonnes coming from Ongopolo ‘s own copper mines.
“There is still considerable improvement required to restore mining and smelter production to previous levels and to achieve our new targets,” WTI said in the financial results released this week.
“Nevertheless, there is no doubt that we have made an excellent start. Consequently, we are confident of steady and ongoing improvement.”
Ongopolo owns Otjihase, Matchless, Kombat copper mines as well as the Tsumeb copper smelter.
The copper mining giant has pinned its hopes on the Tsumeb smelter to refine copper from Ongopolo’s mines as well as toll refine copper from the Democratic Republic of Congo (DRC) and Zambia.
WTI also said that it would be looking for copper from non-traditional markets such as Botswana and Angola.
The company said that the Tsumeb smelter is one of the only four operating in southern Africa.
“Throughout 2006, there has been an ongoing demand for smelter capacity in Africa. We believe this demand will increase as new mines come into production,” WTI said.
Ongopolo’s smelter is connected by rail and road to the deep water port of Walvis Bay, which analysts say has excellent access to copper markets around the world.
“The port facilities are superior to those in Angola, Mozambique and Tanzania, and it is far less congested than the ports of South Africa,” WTI said.
The firm said that the Tsumeb smelter is also linked by road to the Zambian copperbelt and extensive copper mines in DRC’s Katanga province.
“Tsumeb therefore has potential to become a key link in an important regional copper corridor from central Africa to Walvis Bay,” WTI said.
The Ongopolo smelter, which had long been rendered redundant has capacity to process 80 000 tonnes of copper annually. WTI said that with sufficient smelting demand in the southern African region, the Ongopolo smelter could be ‘relatively quickly recommissioned.’
WTI said that it would soon start new copper and silver mining projects at Tschudi, situated just outside Tsumeb, Berg Aukas project near Grootfontein, and an interest in a uranium mining project at Valencia in western Namibia.
“A number of tailings and slag retreatment projects are also being evaluated,” WTI said.
The firm said that it was establishing a mining school in Tsumeb to provide Ongopolo with a flow of young miners.
“This is a valuable contribution to improving Namibia’s skill base and reducing unemployment,” WTI said.
Apart from Namibia, WTI also owns substantial copper resources in Zambia’s copperbelt, Luanshya.
London Metals Exchange (LME) copper futures have been stuck in an US$7 000 to US$8 000 per tonne range for the past four months, coming under pressure in recent weeks due to inflows of stocks into exchange warehouses.