TORONTO (miningweekly.com) – The giant Tenke Fungurume copper/cobalt mine, in the Democratic Republic of Congo, is operating at above its nameplate capacity, less than two months since the operation began shipping its first copper cathode, Lundin Mining CEO Phil Wright reported on Tuesday.

US miner Freeport-McMoRan Copper & Gold operates the Tenke Fungurume project and owns an effective 57,75% stake, while Toronto-based Lundin holds 24,75% and DRC State-owned miner Gécamines owns the balance.

Speaking at a conference in Toronto, Wright was effusive in his praise for Freeport's accomplishment in building the $1,75-billion mine.

“This is not just an everyday occurrence...we are seeing one of the world's great orebodies coming into production,” he said in a presentation.

He also said that he expects that the Tenke asset will produce “surprises to the upside” over the next five or ten years.

Wright suggested that an estimated production rate of 450 000 t/y to 500 000 t/y in the long term is “probably conservative”.

At the end of 2008, the reserves at Tenke stood at 119-million tons, at 2,6% copper and 0,35% cobalt, for 5,9-billion pounds of copper and 0,7-billion pounds of cobalt.

The mine produced its first copper cathode in April, and Freeport CEO Richard Adkerson said later that month that the company was focused on completing the cobalt and acid plants at the operation, which will ramp up to its full annual capacity of 250-million pounds of copper and 18-million pounds of cobalt in the second half of 2009.

CLEAR FOCUS

Lundin has had a tumultuous time over the last year or so, after plunging metals prices left some of the company's operations unprofitable, and a plan to be acquired by cash-flush HudBay Minerals fell apart earlier this year.

However, the company has sold some assets and closed others, and now has a “very clear focus” on its three core assets – Tenke, Neves Corvo, in Portugal, and Zinkgruvan in Sweden.

The company also operates a smaller asset, Aguablanca, in Spain.

At Neves Corvo, which is currently only producing copper, the firm expects to restart zinc production in 2011, Wright said on Tuesday.

He said that he expects the zinc price will eventually show significant gains, because there are not enough known deposits of the metal to supply the world's needs.

The price of zinc rose above $2/lb in 2006, but retreated since then, to fall to around $0,50lb by year end of 2008 after the economic crisis hit. However, the metal has since regained some ground, to around $0,70/lb.

“Structurally, we are seeing a deficit building in zinc and we are going to see the zinc price respond once we get back to a normal growth trajectory.”

Lundin recently raised $149,2-million in an equity offering and repaid $55-million of its debt, and is in the process of renegotiating a smaller, simplified credit facility.

The company has also put in place a copper hedging programme to secure a “healthy” price for about one-half of its copper production of the next 12 months.