Name and Location
Gamsberg-Skorpion integrated zinc project, South Africa and Namibia.
Client
Zinc International is a grouping of Vedanta Resources’ zinc assets in Africa and Ireland. The group comprises Black Mountain Mining in South Africa, Skorpion Zinc in Nambia, and Lisheen in Ireland.
Project Description
Gamsberg is one of the world’s largest undeveloped zinc deposits, with a compliant resource of 134.7-million tonnes at 5.82% of zinc at Gamsberg north and a reserve of 486.6-million tonnes at 6.6% of zinc.
The project involves the development, construction and commissioning of a four-million-ton-a-year openpit zinc mine, concentrator and associated infrastructure at Gamsberg, in South Africa’s Northern Cape province.
In addition, the project includes the conversion of the Skorpion refinery, in Namibia, to process zinc sulphide material from Gamsberg. The expansion will also extend the life of the Skorpion Zinc operation.
The following associated infrastructure will be put in place, along with the mine and concentrator:
• a tailings dam, a waste rock dump and stockpiles;
• evaporation dams;
• offices, workshops and constriction workers contractors’ camp;
• an estimated 15 km power transmission line from the Aggeneys substation to Gamsberg;
• an estimated 60 km water pipeline from the Pella pumpstation to Gamsberg;
• a 10 km access road from the N14 to Gamsberg; and
• sewage treatment facilities.
The first phase of the Gamsberg mine is expected to have a 13-year mine life.
Net Present Value/Internal Rate of Return
Not stated.
Value
The project is valued at $782-million.
About $630-million will be spent on developing the Gamsberg mine, concentrator and associated infrastructure. The balance of $152-million will be spent on the refinery conversion project at Skorpion.
Duration
The first blast at the mine took place in July 2015.
The project has a construction period of about three years, with first production targeted for the 2017/18 financial year.
Latest Developments
In light of falling commodity prices, Vedanta has had to restructure costs across all of its businesses, including the South Africa-based Gamsberg zinc project.
Vedanta Resources CEO Tom Albanese told delegates at the 2016 Investing in African Mining Indaba that the company had delivered on its $1.3-billion cost-savings plan across its global operations, reducing its net debt by $600-million.
The company has rephased its capital expenditure (capex) at the Gamsberg zinc project, located in South Africa’s Northern Cape, slicing $100-million off its overall project capex in 2016.
Albanese told indaba delegates that capex at Gamsberg would be $40-million for 2016, while capex for 2017 would be reviewed based on market conditions.
Albanese has said that he aims to replenish and grow production at Gamsberg over the long term, with the goal of seeing the Southern African region becoming an important supplier of zinc globally.
Vedanta is also producing special high-grade zinc metal at Skorpion Zinc in Namibia.
Vedanta acquired the Zinc International grouping of assets in 2010. This comprises BMM (South Africa), Skorpion Zinc (Namibia) and Lisheen Mine (Ireland).
Key Contracts and Suppliers
Rand Merchant Bank (capital raising), Le Roux Mining & Commodities (prestripping) and BME (explosives and drilling).
On Budget and on Time?
Not stated.
Contact Details for Project Information
Zinc International VP human resources and corporate affairs Braen Migogo, tel +275 498 39339 or email BMigogo@blackmountain.co.za.
Rand Merchant Bank, tel +27 11 282 8000, fax +27 11 282 8008 or email info@rmb.co.za.
Le Roux Mining & Commodities, tel +27 11 575 1589, fax +27 86 528 0273 or email lerouxmining@gmail.com.
BME, tel +27117098765, fax +27114633023 or email info@bme.co.za.