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Copper boom catching the eye of politicians

Copper producers awash with cash after a doubling of prices are entering the next phase of the cycle: increased fiscal pressure from their host nations, reports Bloomberg.

News this week from three of the top copper-producing nations show authorities are looking for a bigger share of the windfall. While that’s not unusual in periods of high prices, this time there’s the added incentive of finding ways to fund pandemic recovery, while talk of a new supercycle is also helping to ratchet up political rhetoric.

On Wednesday, Chile’s lower house approved a proposed royalty on copper in a move the industry says risks thwarting investment. On the same day, Bloomberg reported that the front-runner in Peru’s presidential race will push for a tougher stance against mining companies to ensure more of the revenue generated by vast mineral wealth stays in state coffers. Hours earlier, the head of Zambia’s state-owned mining investments company was quoted as saying he wants a bigger slice of the revenues from copper operations.

 

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“We could certainly see more examples of this in the coming months,” Colin Hamilton, managing director for commodities research at BMO Capital Markets, wrote in a note to clients.

While copper futures have retreated from the highest levels in almost a decade last month, they’re still almost 90% up from a year ago after Chinese factories bounced back quickly from the pandemic and producers endured disruptions. Now the prospect of a global recovery aided by vaccines and a wave of de-carbonizing pledges paint a rosy longer term picture for the metal used in everything from wiring and pipes to batteries and motors.

That hasn’t gone unnoticed by mining company stakeholders including unions and governments.

In Chile, where the pandemic was preceded by months of anti-government protests, consensus is building that highly profitable sectors such as mining should help finance the pandemic recovery and reduce economic inequalities.

In a country that accounts for more than a quarter of the world’s mined copper, opposition lawmakers want to introduce a 3% tax on copper and lithium produced by companies such as BHP Group and Albemarle Corp. to fund development projects, responding to the rising social and environmental standards of investors and supply chains.

“It’s part of what our country needs — greater economic and social justice and an end to privileges that big companies have had,” Christian Democrat Deputy Ivan Flores said.

In neighboring Peru, the second-biggest copper supplier, Yonhy Lescano said he wants to close tax loopholes and negotiate profit-sharing agreements with multinational companies. Lescano is leading in all major polls ahead of the highly competitive April 11 first round election. His comments will resonate with some isolated communities in the Peruvian highlands that have resisted mining.

In Zambia, ZCCM Investments Holdings Plc, which is finalizing the purchase of Glencore Plc’s Zambian copper unit, also wants larger shares in other companies that produce the metal in the southern African nation, Chief Executive Officer Mabvuto Chipata said in an interview.

Zambia has progressively increased royalties after long complaining that miners in the country seldom report profits and as a consequence pay little in tax. Now ZCCM-IH is seeking to further increase its share of revenues as Zambia prepares to hold general elections in August. Copperbelt Province, home to the mines of Glencore and other foreign companies, is a key political battleground.

To be sure, such initiatives may not see the light of day. As a presidential candidate, Peru’s Ollanta Humala rallied with local communities against foreign mining companies only to embrace the industry after he won office. In Chile, President Sebastian Pinera may veto the royalty bill or seek to block it through the country’s constitutional court.

 

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Companies, via their industry associations, will also fight against changes in the rules of the game. Management teams and boards that have endured previous cycles will be keen to defend margins at a time when operating and building mines is getting trickier and pricier.

But the industry will have to walk a fine line given the rising scrutiny on environment, social and governance issues.

With companies stepping up to highlight their ESG efforts, “host countries may find that the miners might not be as passive this time round,” Bloomberg Intelligence analyst Grant Sporre said in an emailed response.

Source : https://www.miningglobal.com/technology/newmont-operational-excellence-digital-transformation
Annual Report Summaries, Investee Companies

Lubambe Copper Mine Limited Extract from 2021 Annual Report

Lubambe Copper Mine Limited (Lubambe) reported total revenue of ZMW2.92 billion (US$148.60 million),[2020: ZMW2.15 billion (US$115.15 million)]. Over the same period, the Company recorded a loss of ZMW1.8 billion (US$91.38 million), [(2020: loss of ZMW1.58 billion (US$84.81 million)]. 

Lubambe’s road to recovery was a challenging one during the year as problems of poor ground conditions and high ore dilution persisted. Management was continually pursuing various remedial and corrective actions to address these challenges and has since engaged SRK consulting to undertake a review of the resource and devise favourable mining methods that will enhance recoveries from the ore body. 

During the year, Lubambe was carrying out additional work on the concept of the extension project by reviewing the initial work done and updating the mining method as well as reviewing the possibility of mining under the Lubengele tailings dam in preference to relocating and possibly processing the tailings. 

EMR capital, Lubambe’s majority shareholders begun a process to raise up to US$100 million in fresh capital during the year to improve liquidity and fund preliminary works on the extension project. 
ZCCM-IH, ZCCM-IH News

BoZ Gold Reserves Swell

he Bank of Zambia has purchased 282.79 kilogrammes of gold since December, 2020 at a cost of K345.6 million.

About 195.95 kilogrammes was purchased from Kansanshi Copper Mining at a cost of K241.8 million, while 86.84 kilogrammes was purchased from Zambia Gold company, a subsidiary of ZCCM-IH at a cost of K103.8 million.

The Bank plans to purchase around 25,200 ounces of London Good Delivery gold from  Kansanshi Copper Mining Plc and 21,000 ounces of dore gold with a minimum of 88 percent purity from Zambia Gold Company per year.

These estimates are based on the gold purchase agreements signed with Kansanshi Copper Mining Plc and Zambia Gold Company in December, 2020.

The objective of this initiative is to shore up and diversify the international

reserves. The viability and attractiveness of this venture is that the gold is being purchased in local currency.

The dore gold purchased from Zambia Gold Company will only reflect in international reserves after refining.

The purchase price of the commodity is not fixed and is determined by the London Bullion Market Association.

The LBMA, established in 1987, is the international trade association representing the global Over the Counter bullion market, and defines itself as “the global authority on precious metals”.

 

Source: https://zambiareports.com/2021/04/23/boz-gold-reserves-swell/
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No job losses once we take over Mopani – ZCCM-IH

MOPANI Copper Mines Plc has no plans to make any employee redundant once ZCCM-IH takes full ownership from March 31, 2021, says acting chief executive officer Charles Sakanya.

And Sakanya has insisted that ZCCM-IH’s imminent 100 per cent ownership of Mopani is the “best deal” for Zambians because citizens will benefit more compared to the previous status quo under Glencore Plc.

Meanwhile, ZCCM-IH chief investments officer Brian Musonda has disclosed that Mopani’s enterprise value is above the US $1.5 billion debt that will be due to be repaid back to Glencore, an indication that the anticipated return on investment will outweigh the cost of purchasing the mine.

Speaking during a Radio Icengelo programme in Kitwe, Thursday, Sakanya said Mopani employees’ jobs were secure and no one would be laid off following ZCCM-IH’s imminent takeover set to be completed by the end of this month.

Mopani’s outgoing parent company, Glencore, is set to relinquish its majority stake in its subsidiary following the signing of an off-take agreement with ZCCM-IH by March 31.

“There are no plans to declare anyone redundant, it’s a going concern, and there’s been no plans for redundancy at all,” Sakanya said in response to a listener who asked a question on miners’ job security.

And he insisted that the transaction was the “best deal” for Zambians because citizens would benefit more compared to the previous status quo under Glencore.

He outlined that the Kitwe-based mine still had in excess of 330 million tonnes of copper ore reserves still required to be mined, signalling a long mining shelf-life.

“In terms of the reserves, we had an independent consultant looking at this as part of the transaction, and they have confirmed what we know. The resources are in excess of 255 million tonnes at Nkana, 76.6 million tonnes at Mufulira, that’s a very big mining resource. With deepening exploration, that life can be extended beyond the 25 years. This transaction is the best that has happened for Zambians. Glencore started off by trying to put the mine on care and maintenance, and government took the opportunity to increase their shareholding and the plan they gave Glencore was accepted by Glencore,” Sakanya said.

“So, there are people worrying about: ‘what’s going to happen? What about the ownership, benefit to Zambia?’ I think this is where we need the support of everyone because, now, Mopani Copper Mines will be 100 per cent owned by Zambians so all the benefits that will ensue will be to the benefit of Zambia whereas in the past, it was to the benefit of the shareholders who were foreign.”

He dismissed any assertion that locals were incapable of successfully running the mining company.

“Zambia has more than adequate capacity to run the mines; we’ve been running the mines for close to a 100 years. The people who run the mines, mostly, are Zambians. In terms of capacity, Zambia has more than adequate capacity to run the mines. For example, from April (2020), when Glencore the care and maintenance shutdown, Mopani has run mainly 95 per cent Zambian workforce, and this will be the twelfth month when Zambians will be running the asset so we have more than adequate capacity in terms of human resource,” he said.

Meanwhile, Musonda disclosed that Mopani’s enterprise value was actually above the US $1.5 billion debt that would be due to be repaid back to Glencore.

He was responding to persistent concerns from various stakeholders about the debt being more than the actual value of Mopani, widely reported at an estimated US $750 million.

“First and foremost, this debt has always been on the books of Mopani so ZCCM-IH is not bringing cash of US $1.5 billion to buy the asset. In comparison to the value being referred to, there’s a very big difference between finance and accounting; when accountants are preparing statements, they go by a number of rules provided, according to the International Financial Reporting Standards (IFRS). So, the US $750 million being referred to, is a number sitting on the books of Mopani, according to the requirements of the accounting standards, so it has nothing to do with the actual value. This is an asset that we are comfortable with; we know everything; we have been part and parcel of the board; we know the value we are going to generate. And when you look at the enterprise value, it is way over and above the US $1.5 billion debt that it is going to carry,” he explained.

“There are also a lot of assets that have been invested in at Mopani whose value is way over and above the US $1.5 billion under discussion. So, to put in simple terms: ZCCM-IH is not paying an amount of US $1.5 billion; Mopani is just going to continue servicing the debt, which it has always carried.”

He also outlined that the State-controlled mining investment firm will not need to raise capital outside Zambia to run the mine as there were sufficient resources locally to manage the asset.

“When we were doing a detailed analysis, which was done, and also, this is the reason we accepted the value of the debt of US $1.5 billion because we know that this is sustainable. Also, we don’t need to look for money from outside. However, in case there’s need, it is possible that we can raise funds from the market. But from the interactions that we’ve been having with management, we don’t need to go to the market and raise funds for Mopani, it is a very good asset,” said Musonda.

In line with one of the pillars of its new strategic plan for 2020-2026 of increasing stakes in its underlying mining assets, ZCCM-IH is set to acquire 90 per cent of the issued shares of Mopani Copper Mines from Carlisa Investment Corp as represented by Glencore.

The acquisition will result in ZCCM-IH taking full ownership of Mopani.
The transaction is scheduled to be fully consummated by March 31, 2021, after the ZCCM-IH Extraordinary Annual General Meeting on March 30 in which ZCCM-IH shareholders will vote on the unprecedented transaction.

On January 19, 2021, the Zambian government, through ZCCM-Investment Holdings acquired 90 per cent shares in Mopani, adding to its already existing 10 per cent shareholding in the company.
The signed off-take arrangement deal is priced at US $1.5 billion, which will be financed through a loan to be serviced from Mopani’s future copper sales.

Government now has 100 per cent ownership of Mopani, a move, which, however, received mixed reaction, with more stakeholders voicing serious concerns as to the commercial viability and economic benefits government would accrue on behalf of taxpayers in the off-take arrangement deal negotiated with Mopani’s outgoing parent company, Glencore, the Swiss-based commodities and minerals trader.

 

Source : https://diggers.news/business/2021/03/22/no-job-losses-once-we-take-over-mopani-zccm-ih/
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Why the acquisition of 90% of additional shares in Mopani by ZCCM IH is a timing masterstroke

In the era of ‘irrational’ economics, astute investors must keep an eye on the happenings in the macro environment to make sound investments. Although not a traditional risk associated with happenings in the macro, the global shutdown that Covid 19 caused meant that commodities would only see a northward trajectory when the world opened up.

Copper has experienced a bullish run that has seen it rise to levels last seen over 8 years ago. According to an article published on CNBC early this year, “The demand for copper has been on the rise and is expected to go further up with top copper consumer China getting back to business after a long holiday and optimism of a stronger global economic recovery in view of COVID-19 vaccine roll-outs”.

Therefore, this means that investors who have been keeping a close eye on these developments and are involved in transactions such as acquisitions of commodity extraction assets such as mines are destined for an unprecedented windfall.

On Tuesday 30th March 2021, the ZCCM IH Board will host its investors at an Extra Ordinary General Meeting (EGM) to seek its shareholders’ approval for the Transaction whereby it will acquire 90% of the issued shares of Mopani Copper Mines Plc (“Mopani”) (being all of the issued shares in Mopani which it currently does not own) from Carlisa Investments Corporation (“Carlisa”).

This transaction is one of many complex transactions that ZCCM IH has structured since its establishment. The transaction is backed by its recently released strategy which will see the investment house more active in an extractive industry that is poised for a boom in this decade. The nostalgic transaction represents an opportunity for ZCCM-IH to transform from a pure investment company to owning and operating a major mining asset in Zambia.

Shareholders in ZCCM IH will have the opportunity of seeking clarity from the Board regarding some of the intricacies of the transaction. At face value, the transaction will ZCCM IH increase its shareholding implying going forward, the woes it faced as a minority shareholder of not having its voice heard will now be the loudest voice in the board room. This is critical if the investment house is going to be able to extract better value from its underlying assets and remedy some of the previous challenges it had when it was the smallest voice in the boardroom.

Shareholders will also be reminded about how the asset they are now increasing their shareholding in was capitalized. Extractive industries are capital intensive and often not financed from cashflows due to the nature of the business as well as the working capital cycle of the value chain. Historically, Mopani has been funded by shareholder loans from Carlisa and Glencore Group. As of 31 December 2020, the total value of the loan was $4.3bn, under the terms of the debt agreement, this has been amended to $1.5bn.

The $1.5bn will be amortized through a royalty payment mechanism that has been structured in such a way that the cash water fall system will ensure all creditors are paid and equity is capitalized. The revenue stream will be assured through the signing of an offtake agreement that will see Glencore purchase the product at a market price that is based on London Metal Exchange (LME) pricing. In short, the continued acceleration of Copper Prices that have now breached the $9000 per ton mark are a win for ZCCM IH.

Source: http://fizambia.com/?p=10196 
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Job Advertisement

Zambia Gold Company Limited (Zambia Gold) was incorporated on 10 January 2020. Zambia Gold (the ‘Company’) is co-owned by ZCCM Investments Holdings Plc with a 51% stake and the Ministry of Finance owning the remaining 49% stake.  Zambia Gold is mandated to lead the development of the gold sector in Zambia by undertaking commercial activities for the benefit of all stakeholders. In order to achieve this objective, Zambia Gold Company Limited will broadly undertake the following activities:

  1. Acquire exploration licenses and carry out mineral exploration with a focus on gold (either directly or in partnership with other entities)
  2. Develop and operate mines for gold and other precious minerals
  3. Refining, grading, producing, cutting, and processing gold and other precious minerals
  4. Buying and selling of gold and other minerals
  5. Support artisanal mining operations and transforming these into commercially viable activities
  6. Pursue value addition opportunities in the precious metals sector

In order to achieve this mission, the Company invites applications from suitably qualified and experienced individuals who are innovative, energetic, and performance-driven to fill the following positions:

Procurement Officer X 1

Location         : Kasenseli Gold Project-Mwinilunga
Department  : Chief Executive Officer’s Office
Report to        : Procurement Manager

Job Purpose
To effectively undertake and manage the procurement of goods/services/works in order to ensure their timely provision and contract management to ensure availability for the smooth operation, compliance with Public Procurement Act, 2008 and its Regulations.

Main duties

  1. Develop and implement the procurement plan to ensure all requirements for all user departments/directorates are captured in a timely and holistic manner.
  2. Continuously train (on the job) implementers in the preparation of terms of reference, specifications, and proactive follow-up of these inputs in the bidding processes;
  3. Prepare bidding documents based on acceptable bidding standards;
  4. Ensure all prior review requirements such as obtaining the No Objections from ZPPA are compiled within a timely manner;
  5. Ensure that all the due tendering processes are adhered to: sufficient publications, strict adherence to deadlines, transparency in communications with bidders, the publication of bid results, etc.;
  6. Ensure acceptable record-keeping in procurement with at least a complete procurement file for each procurement from start to contract finalization.
  7. Maintain all procurement records in a form appropriate for regular auditing and spot checks by relevant checkers;
  8. Oversee the contracting process, including ensuring that Evaluation Committees have people with appropriate expertise;
  9. Monitor implementation of contracts: progress report status on a weekly and monthly basis; and intervene to address problem upon request by the Project Manager;
  10. Ensure that goods and services financed have been procured in accordance with the Zambia Public Procurement Act;
  11. Prepare quarterly reports of progress with implementation of the Procurement Plan, and regularly inform the Project Manager of challenges and make proposals to overcome bottlenecks;
  12. Ensure that all procured goods are receipted and maintained using the approved store documentation.

Qualifications and experience

  1. Professional Qualifications
    Full Grade 12 Certificate;
    Graduate Diploma in Purchasing and Supply (CIPS) Level or Bachelor’s Degree in
    Purchasing and Supply.
    Member of the Zambia Institute of Purchasing and Supply (ZIPS)
  2. Minimum Relevant Pre-Job Experience:
    At least 4 years experience in a high demanding busy industry.
  3. Skill Specifications:
    Negotiation skills
    Communication skills
    Numerical and Computer skills
  4. Other Attributes (Personality Traits)
    Quality Oriented
    Price-conscious
    Integrity
    Collaborative
  5. Valid Driver’s license

2. Security Officer X 1

Location        : Kasenseli Gold Project-Mwinilunga
Department : Alluvial Gold Processing
Report to       : Project Manager

Job Purpose

To provide security, site access control services and assistance to the assigned project and jobsite activities. To assist in the implementation of security programs that are incorporated into the project construction activities, develop an effective working relationship with allocated project personnel, and advise their supervisors regarding their progress, any issues, and actions required. To ensure adequate investigations are carried out in order to promote industrial security which when not handled well results into loss of company property and revenue.

Main duties

  1. Secure premises and personnel by guarding and patrolling property;
  2. Enforce access control and maintain security data;
  3. Detect and prevent crime;
  4. Implement access control measures including physical and electronic measures;
  5. Sensitize employees on security-related issues;
  6. Supervise subcontracted Security Guards;
  7. Direct investigation of security incidents to establish the severity causes and initiate remedial action
  8. Ensure that all the daily security operations run smoothly and effectively
  9. Investigates any suspicious activities that take place and report unlawful activities such as theft or vandalism to Project Manager for further action
  10. Follow up with police and courts on various outstanding cases of theft to
  11. recover property and ensure that justice is done.
  12. Liaise with government security wings to ensure quality service delivery.

Qualifications and experience

  1. Professional Qualifications
    Full Grade 12 Certificate
    Bachelor’s Degree in Criminology/Psychology, Social Psychology, Public Administration or any other social sciences
    Police or Military Training necessary
  2. Minimum Relevant Pre-Job Experience:
    5 years relevant experience in a reputable organization with a traceable record.
    Experience in criminal investigations will be an added advantage.
  3. Skill Specifications:
    Ability to communicate effectively in English
    Interpersonal skills
    Computer skills
  4. Other Attributes (Personality Traits)
    Integrity and Honesty
    Reliability and dependability
    Initiative
    Confidentiality
    Sober character
    Physically fit
  5. Valid Driver’s license

Zambia Gold Company Limited provides equal employment opportunities to all Zambians on merit without discrimination on the basis of age, gender, color, tribe, disability, or religion.

Interested, suitably qualified, and experienced persons should send their application together with certified copies of Academic and Professional certificates; a detailed Curriculum Vitae with traceable references and a copy of the NRC should reach the undersigned not later than Thursday, 1st April 2021.

Only shortlisted candidates will be responded to.

Head Human Resources and Administration
Zambia Gold Company Limited
Subdivision F/377a/30/B
Kudu Road, Kabulonga
LUSAKA

Email: jobs@zccmnew.wpenginepowered.com

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Statement from ZCCM IH CEO on the new strategic direction of the investment company

We have developed the ZCCM Investments Holdings Plc (ZCCM-IH) new Strategic Plan 2020-2026 to pursue a mining focused investment strategy that is premised on growth and innovation, with a clear intent to drive the company to investment optimisation and financial excellence. This new strategic plan (the”2020-2026 Strategic Plan” or the “Strategic Plan”) has been motivated by the need for ZCCM-IH to re-focus its investments in mining and the mining value chain.

We have refined the previous sixteen Strategic Goals into four Goals that underpin the company’s strategic impetus, which are to:

1. Extract, and where possible, to add value to our current portfolio;
2. Investment in greenfield and brownfield mining, and mining related ventures across a diverse range of minerals:
i. Commodity diversification to include cobalt, gold, manganese and other base metals, gemstones, limestone, phosphate and rare earth minerals;
ii. Value addition downstream and exploration upstream: and
iii. Energy – to support sustainability of mining operations.

3. Achieve operational and financial excellence; and

4. Generate greater shareholder value by ensuring price discovery on our stock exchange listings.

CEO ZCCM IH Mabvuto Chipata flanked by his team who will be critical in executing the new strategy

In pursuit of our ultimate goal to create a world class investment holding company in Zambia and beyond, I urge all ZCCM-IH staff to play their role in fully implementing this strategic plan.

Sincerely,

Mr Mabvuto T. Chipata
Chief Executive Officer
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Zambia’s External stands at $ 12.74 billion, and not $ 27 billion-Ministry of Finance

The government has said that Zambia’s external debt remains at 12.74 billion dollars, contrary to claims that the debt was 27 billion dollars as of 2019.

The Ministry of Finance said that the 12.7 billion dollars was as of end of December 2020.

A statement availed to to the media by the Ministry in Lusaka today said that some media reports made the 27 billion dollars debt claim, following a misrepresentation by the World Bank’s International Debt Statistics published in October 2020.

The statement noted that the 27-billion dollars debt refers to all external debt including debt held by the private sector such as mining companies, banks, and other corporates which government is not in charge.

The Ministry notes that government has no liability for debt held by the private sector, adding that the World Bank’s report makes it clear that government external debt was around 11-billion dollars in 2019 similar to what the government reported.

The Ministry further noted that Zambia engaged in positive and constructive virtual talks with the International Monetary Fund earlier this month, making clear progress towards an agreement on a policy package and path to fiscal and debt sustainability.

The statement further stated that the country hoped the current engagements with various multilateral stakeholders will contribute to its goal of restoring public debt sustainability.

Meanwhile. ZCCM-IH Chief Investments Officer Brian Musonda has said that Mopani Copper Mine (MCM) will significantly contribute to Zambia’s economic revenue, now that the mine is in the hands of Zambians, adding that the mine will have something to show to the nation as positive things will be actualized.

Speaking during Radio Icengelo programme in Kitwe yesterday, Mr. Musonda said that ZCCM-IH working with Mopani management have worked on a strategy to turnaround the mine and make it profitable and that ZCCM-IH financials show that under Glencore the mine has been recording losses since privatisation.

Mr Musonda said that Zambians who have been operating the mine since April last year are upbeat about growing the company and will ensure it is run professionally.

Mr Musonda said that ZCCM-IH management is optimistic that things will be handled well by the Zambians.

“We are very sure that something positive will come out from Mopani because Zambians will ensure that the mine contributes something to the country,” Mr. Musonda said.

“Mopani will continue to produce results and we will give them support as shareholders, the performance of Mopani has improved and the financial status of the mine is encouraging,” he said

The acquisition will result in ZCCM-IH taking full ownership of Mopani. The transaction is scheduled to be fully consummated by 31 March 2021 after the ZCCM-IH Extraordinary general meeting on 30 March 2021 in which ZCCM-IH shareholders will vote on the transaction.

 

Source : https://www.zambianobserver.com/zambias-external-stands-at-12-74-billion-and-not-27-billion-ministry-of-finance/
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Vertical drop system a game-changer for emulsion explosives

In a recent expansion project of its Chambishi mine in Zambia, Non-Ferrous China Africa (NFCA) opted to install AECI Mining Explosives’ emulsion vertical delivery system (EVDS) as part of its aim to develop a cost-effective mining operation. Delivering both the emulsion and sensitizer at depths of up to 980m.

NFC Africa Mining PLC (NFCA), is one of the largest underground mines in Zambia’s Copperbelt province. The Mine was initially called Chambishi Copper Mines under the management of the Zambia Consolidated Copper Mines currently called ZCCM-IH. China Nonferrous Metal Company (CNMC) took over later in the year 1998 while it was under care and maintenance.

NFCA has three main mining areas, namely: Main Orebody (MOB), West Orebody (WOB) and the new South East Orebody (SEOB). The SEOB is a massive project which has attracted capital investment of about $830 million (USD).

NFCA and Sandvik Mining and Construction entered into a partnership to develop a highly automated and digitalized Mine in Africa. At the SEOB, we are using intelligent Sandvik latest equipment with new technology. This investment is for equipment, infrastructure and other costs involving mining.

They recently introduced a new shaft at its Zambian-based Chambishi Mine, which included a number of leading edge technologies, such as AutoMine@Lite, AutoMine@fleet, OptiMine and Fuel vertical drop aimed at developing the most cost-effective mining operation.

Having previously engaged AECI Mining Explosives on this system in 2012, NFCA was already aware of the benefits of the EVDS. This integrated system delivers the base emulsion, and sensitizer required directly to a storage facility underground.

These storage facilities are designed to be in close proximity to the underground production areas. This is achieved through a piping system installed in a borehole that connects the underground storage facility to the surface infrastructure.

The company was already using AECI Mining Explosives’ emulsion product underground – the UG200S (sticky) product ideal for up hole charging – and wished to continue reaping the benefits of this emulsion. The Mine requested that both emulsion and sensitizer products be delivered to its 680 m and 980 m mining levels.

Project scope and timelines

AECI Mining Explosives analysed the space available, product demand, and blasting schedule of the client in order to provide an optimal surface and underground storage capacity, as well as a tailor-made delivery system. Various installation options were considered to meet the Mine’s requirements and to ensure that the system could be operated safely and sustainably.

Michael Woolridge, explains that the agreed scope was a joint venture in which AECI Mining Explosives supplied all fabricated plant and equipment, as well as engineering and project management expertise to manage the installation and commissioning of the Project. NFCA was responsible for all installation work on site.

The process design and product testing were managed by a team of AECI Mining Explosives specialists and ELB Engineering, the technology partner for the EVDS. The local AECI Zambia team paved the way for a successful installation and was instrumental in the outcome of the Project.

“A contract was signed with NFCA at the end of July 2018 and work commenced on January 1, 2019,” explains Woolridge.

“The installation was finalised at the end of January 2020, on time and within budget. The project scope included the supply and delivery of all plant and equipment, the preparation of the site, drilling of the borehole, blasting of the underground cavities, as well as installation and commissioning.”

On February 5, 2020, the first emulsion was dropped to the 680 mining level, followed by a drop to the 980 level the following day. The system was immediately available at full capacity and continues to operate as such.

Key benefits

Before the EVDS was installed, the Mine utilised 4-tonne emulsion cassettes that were reloaded on the surface and transported via the cage network to each level.

This methodology was costly, compromised the quality of the product and time consuming, says Woolridge, while delays caused by double handling, cage times and spillages at decanting points were commonplace.

Thus, the critical consideration for the Mine in opting for AECI Mining Explosive’ EVDS was to free up cage time to enable the Mine to increase hoisting capacity, which is the usual bottleneck on most mines, given that you can only mine what you can hoist. The solution would also provide seamless inventory control of emulsion from delivery to the mining face.

“A dedicated vertical delivery system and associated storage capacity allow the client to always have emulsion available ‘on tap’ at both the 680 and 980 mining levels, while at the same time freeing up cage time for other activities.

“The client expected full availability of these benefits on completion of the Project, something AECI Mining Explosive’ has managed to deliver from the first day of commissioning,” says Woolridge.

In a nutshell, the key benefits the client has realised, include improved safety; seamless inventory control; reduced interface with explosives; optimised ordering, delivery and charging units refilling; reduced maintenance, fuel and asset wear as well as reduced risk of theft. Other gains include reduced time and labour resources.

New depths

Explaining how this feat was achieved, Woolridge says underground emulsion explosives used in up-hole applications have two major characteristics to consider.

The first is that such products are shear sensitive and will deteriorate when exposed to shear. Pumping of emulsion explosives over long distances will introduce such shear. Shear can reduce the usability of the product and may lead to pipe blockages.

“The second characteristic is the minimum burning pressure of the product. Unsensitised explosives are relatively insensitive to sources of heat, but above a certain pressure threshold, the emulsion becomes sensitive to the source of energy.

“Should a blockage occur in a vertical line for whatever unforeseen reason, hydrostatic pressure will build up in the vertical line that may exceed this minimum burning pressure,” he explains.

These two characteristics, says Woolridge, have previously restrained the depth of emulsion vertical delivery systems. AECI Mining Explosive’ R&D department has conducted work to develop an emulsion product that can be delivered under specific conditions to minimise the effect of shear. Rheology models have been developed to predict flow characteristics of the product under various conditions.

Getting the better of challenges

Although successfully delivered, the Project was not without its challenges. It was also the first time that AECI Mining Explosives and NFCA worked together on joint design, supply and construction project of this size and nature.

The key to any ground-breaking project is for both parties to acknowledge the unique nature of the Project and the risks and challenges that can be encountered along the way.  Furthermore, the role each party has to play to ensure a successful outcome is of critical importance.

The Project had significance for both parties – it allowed NFCA to optimise its operation further and provided AECI Mining Explosives with the opportunity to demonstrate that it had the capability of delivering its emulsion product via this innovative technology to depths in excess of 900 m.

The risk of misinterpretation of highly technical information due to the language barriers was identified early on in the Project, and efforts were made by all parties to verify any misunderstanding of information.

“The project teams evaluated the requirements of each phase of the installation and agreed on the provision of on-site expertise as required. “We are excited about the prospects this ground-breaking installation holds for our global mining customer base.

It again confirms that we are leading the industry when providing the mining industry with technology leading innovations and solutions,” says Edwin Ludick, Managing Director for AECI Mining.

 

Source: https://www.miningreview.com/southern-africa/vertical-drop-system-a-game-changer-for-emulsion-explosives/