By the first quarter of 2018, a building site in Kalumbila, in North-Western province, in Zambia, will be transformed into a $40-million manufacturing facility that will produce high-quality mill balls for mines in Zambia, neighbouring countries and the world market, says Zambia Chamber of Mines initiative Mining for Zambia (MFZ).
Kalumbila, MFZ explains, is a purpose-built town planned and funded by mining company First Quantum Minerals (FQM) to support its Sentinel mine, which started operating in 2015.
“The town’s long-term ambition is to become economically self-sustaining, so that it does not depend on the mine for its existence. An industrial zone, aimed at attracting investment through various incentives, is a key part of this strategy,” states MFZ.
The investment in this zone by Chilean impact and abrasion- resistant steel and iron manufacturer ME Elecmetal to develop a mill ball manufacturing facility is a “game changer” on many levels, enthuses Kalumbila Town Development Corporation’s Michael Kabungo.
“ME Elecmetal is one of the world’s leading mine suppliers; their investment is a demonstration of faith in the long-term potential of the town’s industrial zone and it is a catalyst for further investment,” Kabungo told MFZ in an interview.
Mill balls are made of high- quality, hardened steel and are a critical element of mining, states MFZ.
“[Mill balls] are used in giant rotating mills to crush copper ore prior to further processing. And because the balls wear out and need to be replaced regularly, mines keep up to four months of stock on hand. Zambia’s mines currently import their mill balls from China. This ties up millions of dollars in working capital that could be deployed elsewhere,” MFZ explains.
The finished plant will enable mines in Zambia – and neighbouring countries such as the Democratic Republic of Congo (DRC) and South Africa – to procure mill balls at a lower cost and at shorter notice, owing to the proximity of the plant to their operations.
The ME Elecmetal plant will operate in Zambia as a Chilean–Chinese joint venture called ME Long Teng Zambia.
“This is a win-win scenario, not just for the North-Western province but also for the whole of Zambia,” says Kabungo.
Not only should Zambian mines’ procurement costs be reduced, but the export of mill balls is expected to generate foreign earnings for the country, while the plant will employ about 150 taxpayers and procure goods and services from Zambian companies, whose employees will also contribute to economic activity and pay taxes.
“It’s the multiplier effect in action,” says Kabungo, explaining that an initial investment is magnified and multiplied several times over, generating business activity and employment far from the source of the original investment.
However, this business activity and employment has already started, states MFZ.
“On any given day at the construction site, some 80 people are employed to lay the foundations for what will be one of the largest industrial buildings in Kalumbila.”
Kabungo notes that construction workers need to eat, buy fuel and accommodation. He also adds that there are already enquiries for school placements for the children of the plant’s future employees who will live and work in the town when it starts operating.
“There’s a tangible feeling of excitement in the air at Kalumbila with the coming of the ME Elecmetal plant. The fact that it is now actually under construction, and not just an idea on the drawing board, has caused a flurry of interest from other international investors,” Kabungo says to MFZ.
According to Kabungo, the major shareholder of an Australian engineering company visited the ME Elecmetal site and the industrial zone in July and is keen to build a pipe-extrusion factory nearby.
This factory would supply the mining industry with specialist piping, which currently has to be shipped in from Australia, and would mean cheaper piping for the mines, as well as increased employment and business activity for Kalumbila.
Australian junior mining company Argonaut Exploration is also prospecting for copper in the surrounding area on behalf of one of Chile’s main copper mining companies Antofagasta, explains MFZ.
Further, the Ndola-based earthmoving company undertaking the earthworks for the ME Elecmetal plant, Joe’s Earthworks & Mining, is considering setting up in the town, MFZ adds.
“It’s significant that all this activity is focused here around Kalumbila, rather than more developed Solwezi,” says Kabungo.
He adds that this activity is an illustration of Kalumbila’s strategic location relative to export markets, such as the DRC and Angola, as well as the attractive tax incentives that investors are able to negotiate with the government of Zambia.
“It’s not just Kalumbila’s industrial zone that is becoming the focus of fresh investment. An entire neighbourhood of 50 new houses is nearing completion close to the town centre, thanks to an investment of $1.4-million by Zambia’s Workman’s Compensation Fund Control Board,” MFZ enthuses.
This, MFZ explains, is the largest single private investment since the town was built, highlighting that the fund has signalled its intention to build a further 100 houses for more than $3-million.
Besides increasing the size of the housing pool in Kalumbila, these investments allow the fund to broaden its investment portfolio by diversifying out of government securities.
“The increasing private investment in Kalumbila is squarely in line with the founding vision of FQM to build a thriving, self-sufficient town capable of outliving the mine when it eventually closes in 25 years’ time,” says Kabungo.
It is the hope of the Kalumbila Town Development Corporation that the latest investments will create a snowball effect and produce even more investment.
“Hopefully, this will produce a greater sense of urgency in government to speed up the granting of land-title and commercial permits to investors, and to assure the electricity supply necessary to power Zambia’s newest and fastest-growing town,” MFZ enthuses.