Mopani spending $560m to triple production

26th August 2005 By: andrew lanham

It is 08:00 on a Thursday morning, and Mining Weekly is being taken on a visit to Mopani Copper Mines’ (MCM’s) Mufulira Deep project.

The Mufulira Mine has been in operation since 1933 and has, in its lifetime, produced approximately 20-billion pounds of copper.

Standing in the cage in the Lubwe shaft waiting for the onsetter to ring us away, the underground manager for Mufulira Deep, Black Simutenda, explains that the Mufulira Deep section, which is effectively a new mine, is one of the areas of expansion open to MCM and will extend the life of Mufulira by at least 15 years.

“The main production level for the Mufulira mine is the 1340 level, and, although we are still mining in the levels above 1340, these areas are progressively becoming worked out,” explains Simutenda.

“We also needed to review the way we mine and, for this reason, the Mufulira Deep section will be a completely mechanised oper- ation,” he adds.

To exploit this extension to the Mufulira orebody, a decline is being developed from 1340 to 1407 level.

The new Mufulira Deep is using a sublevel caving technique to extract the orebody, which dips at about 50˚ on average.

In the new decline that leads from the 1340 level, new production levels have been developed into the orebody at 17 m vertical spacing.

“So far, we have opened up the 1357 and 1373 levels and we are busy now opening up the 1390 level,” explains Simutenda.

Ore is hauled from the stopes by truck to a new tip on 1340 level.

The grade sampled on 1373 level averages four per cent copper.

The stope faces in this section that Mining Weekly saw were banded with visible bornite and chalcopyrite mineralisation.

What is promising for the future is that, at depth, the orebody is still open and the grades show no sign of pinching out. Mufulira mine, along with the other mines on the Copperbelt, faces, and is coping with, the challenge of water.

In terms of underground ma-chinery, Sandvik Mining and Con- struction has 48 load-haul-dumpers (LHDs) and drillrigs underground at Mufulira Deep.

These are mainly Toro 400D machines, though recently the mine has acquired a number of larger Toro 1400 D LHDs.

To haul the ore up the decline to the tip, the mine has taken delivery of four new 55-ton Caterpillar AB 55 dump-trucks.

Simutenda shows Mining Weekly a crowded workshop.

“We will be replacing this with a larger workshop on 1340 level, which will have a fully concreted floor and will be large enough to accommodate the new Toro 1400D machines and the large Caterpillar dump-trucks,” says Simutenda.

When ZCCM sold MCM to the joint venture of Glencore and First Quantum, it also sold a complete feasibility study for what is now in the process of becoming the Mufulira Deep mine, explains MCM CEO Tim Henderson.

“Our part of the deal was that we had to extend the life of Mufulira mine. However, at that stage, there was no underground infrastructure from which to deepen the operation.” Development of the Mufulira Deep section started in July 2003 and, in a comparatively short space of time, a remarkable amount of development has been achieved.

On the road to being the Copperbelt major
At the time of MCM’s purchase, in April 2000, the price was $43-million.

However, this came with a required commitment from MCM to spend $159-million on upgrading and developing its Mufulira and Nkana divisions.

Although MCM started off as a joint venture between Glencore International (46%) and First Quantum (44%), with Zambia Consolidated Copper Mines (ZCCM) holding the balance, Glencore has assumed complete control of the operation, by increasing its shareholding to 73,1%.

The Mufulira division comprises an underground mine, a concentrator, a smelter and copper refinery, while the Nkana division is a mine with a concentrator and cobalt plant.

The Mufulira mining team is bringing production up to 10 000 t/d with the introduction of No 14 shaft, a formerly-closed shaft which the mine is rehabilitating.

The shaft work is being completed at present, and the underground conveyor system should be ready by the end of the month, explains Henderson. Of the two MCM operations, Nkana has the greatest mining potential, while Mufulira’s longer- term value is in its metallurgical facilities. The Nkana mine, located on the outskirts of Kitwe, has been in production since 1932, and during its life has produced some six-million tons of copper.

Nkana Mine hoists ore to surface through three operating shafts, the Mindola Shaft, the Central Shaft and the South Orebody Shaft (SOB).

Vertical crater retreat is the predominant mining method while sublevel open stoping and sublevel caving methods are also used.

Nkana’s long-term future lies in the synclinorium, an orebody of some 90-million tons, situated between the Central and SOB shafts.

With the synclinorium reserves, Nkana has a life of mine of at least 20 years.

The upper levels of the syn- clinorium are currently being reached by means of the SOB shaft.

The Nkana complex is supposed to be hoisting between 13 000 t/d and 14 000 t/d but there are some problems at present with the shaft equipment. MCM has now carried out all the two-to-three-week shutdowns which the shafts need each year, and the SOB shaft, which had been causing some problems, is up to speed again.

“By mid July this year, I expect to get back to 13 000 t/d to 14 000 t/d,” says Henderson.

The Nkana synclinorium is effectively a new mine and is, in some respects, similar to the Mufulira Deeps project in that it is a reserve that has been known about for some time that had not been developed due to a lack of capital.

Apart from the synclinorium and Mufulira Deeps projects, MCM also has some smaller but interesting projects, such as the Mufulira East project near the existing Mufulira No 3 shaft.

Asked whether MCM is carrying out exploration for new deposits, Henderson explains that this is not the policy of the majority shareholder.

“Glencore specialises in buying operations that have potential, but are not doing well, and then turning them around,” he explains.

Henderson explains that he first arrived on the mine three years ago with the brief ‘to get this thing back on the rails’.

At that stage, MCM was producing about 83 000 t of copper a year.

After three years, in 2004, MCM near doubled that to 161 000 copper tons.

This year, Henderson is targeting production of 175 000 t/y to 185 000 t/y which is not as good as the 190 000 t/y he would like to have achieved.

Ultimately, Henderson would like to see MCM production up in the region of 240 000 t/y and 270 000 t/y in two years’ time.

Isasmelt the key
Until the end of last year, MCM spent $280-million on new projects and, this year, it will be spending another $180-million. In 2006, a further $100-million will be spent on upgrades and new plant.

Henderson points out that, while there is a lot of activity on the Copperbelt, much of this is being funded with banks’ money.

“It is a real act of faith on the part of Glencore to invest this level of financial commitment into MCM,” he adds.

Glencore is picking up the tab for MCM’s expansion programme, for, though First Quantum has a 17% shareholding, the agreements between the two companies do not require it to contribute.

The plant that MCM inherited was very run-down and the mine is currently demolishing completely unserviceable sections and selling them for scrap.

A programme is currently under way to rebuild and modernise the Mufulira metallurgical complex.

This will comprise a new primary smelting furnace, a matte-settling furnace, a sulphuric acid plant, an oxygen plant and an update of the associated infrastructure.

Currently, MCM’s smelter has the capacity to process about 410 000 t of concentrate a year. New technology, known as Isasmelt, will be installed in early 2006 at the Mufulira smelter by the Swiss firm Xstrata to dramatically increase the capacity for processing copper concentrate to 650 000 t/y.

The new furnace will be a top-blown submerged-lance vessel in which concentrate will be smelted to a matte containing about 60% copper. The capital involved and the operating costs are relatively low.

However, the main advantage is that the Isasmelt unit will be simple to operate and will be very flexible.

The first stage of Isasmelt, which will replace the existing electric furnace, will process 650 000 t of concentrate which will be increased, as soon as is practically possible, to 850 000 t/y.

Isasmelt is more flexible in terms of its feed and will be well-suited to the task of smelting different concentrates being accepted from neighbouring mines.

The current furnace is giving problems, as it is now three years overdue for the periodic shutdown that all copper smelters need from time to time.

Henderson envisages that the final stage of Isasmelt will be in the region of a million tons of concentrate processed a year. This would involve taking in concentrates from other mines for toll-smelting and would present an attractive option for some of the smaller miners as MCM has the largest capacity, and has built up a reputation in the last couple of years as being a lower-cost, more-efficient option for smelting on the Copperbelt.

MCM recently concluded a five-year offtake agreement with Kansanshi and there are ongoing negotiations with some of the other copper producers.

The new oxygen plants for the copper and the cobalt operations are now being built, as well as the new roaster in the cobalt plant.

Along with these upgrades, SMS Demag is busy installing a matte-settling furnace, which will remove a significant portion of any copper remaining trapped in the slag.

This project is a new departure for MCM and promises to recover about 30 000 t of copper a year that otherwise would have been discarded.

MCM is also busy erecting a sulphuric acid plant, which is being constructed by Grinaker LTA.

The first phase is currently being erected and will treat the fugitive gases from the furnace side of the smelter, to produce about 850 t/d of acid.

The second phase, which will have a similar capacity of 850 t/d to 1 000 t/d, will capture gases from the converters and the anode furnaces.

This will be done only once the furnace has been upgraded in two years’ time.

The acid plant will serve to capture a large percentage of the SO2 gases currently being emitted into the atmosphere, and will fulfil what was one of the provisions of MCM’s agreement with the govern- ment.

Importantly, the sulphuric acid plant will supply MCM’s latest endeavour, which is the onsite leaching project at Mufulira mine, which will take up 400 t to 550 t of acid a day.

In the upper levels of Mufulira mine there are substantial quantities of ore which is not of sufficiently high grade to justify bringing the material out of the mine.

These ore reserves will be leached at their current underground locations, with the pregnant leach solution being pumped from underground for processing on surface.

Ultimately, this project will produce about 50 000 t of copper a year.

“It is a great system and, although it has had some teething problems, I am confident that these will be overcome,” says Henderson.

The troubles concerned the type of pumps that were used; a problem that is not insurmountable, he explains.

“As there is no one else doing this type of work, it really is a question of learning as we go,” continues Henderson.

“To move this mine forward, our shareholders understand that we are going to have to make some fairly dramatic changes and innovate, as sticking to what was done yesterday will not do the trick,” he adds.

In May, the leach project performed well, and produced 850 t of copper at a cost below $0,60.

MCM’s cobalt production is a significant contributor to the revenue stream.

This contribution varies according to the metal prices of copper and cobalt. However, at current prices, cobalt makes up about 35% of MCM’s earnings.

It is expected that the significance of cobalt will decrease over time, Henderson explains.

He calls cobalt a by-product because MCM anticipates producing some 2 000 t to 2 500 t of cobalt as opposed to the 270 000 t of copper in 2007.

MCM has little control over the amount of cobalt it produces, as the prime economic target is copper and in this process some cobalt is produced.

“When times are tough it is a very nice sweetener even though the level of this production is not something MCM can control to any great extent,” he adds.

Upgrading the human resource
MCM, the largest employer on the Copperbelt, employs some 16 000 people, of whom 40% are contractors. This workforce has been swelled by the additional people needed to build the various expansions that the mine is undertaking.

At present, MCM is the largest employer in Zambia “and definitely the most profitable”, adds Henderson.

When he arrived, in the first 18 months, of the 58 expats working for MCM, he replaced about 45 of these with Zambians.

The 9 000-strong Zambian workforce was reduced by 900. “The first year was to set the tone but, since then, MCM has been putting in new projects and the staff numbers have been climbing once more. However, this time the attitude of the employees is somewhat different,” Henderson says.

In terms of morale, the majority of the workforce is not aware of the problems of the mines and the country in general, he elaborates.

“There is an attitude that the mines have always worked and the employee always gets paid irrespective of productivity or profitability,” he says.

The Zambian copper-mines were sold as they had been losing money and the World Bank had reached a point where it was not willing to subsidise consistent loss-making operations.

Understandably, MCM, along with the other new entrants into the Zambian copper industry, are not always appreciated, as they demand more effort for much the same pay.

However, to keep the mines going for the next 15 to 20 years, the privatisation initiative was an absolute necessity.

To change the mentality is an uphill battle and Henderson says that after three years, the message is starting to get through.

However, this has required an intensive effort, with training, incentive schemes, bonuses, and an ongoing communication campaign.

When asked about the future of the Zambian mining industry, Henderson explains that there is a need on the part of the authorities to accept that expatriate skills are still needed on the Copperbelt.

Henderson speaks with some authority as he grew up in Kitwe and has witnessed the full cycle of Zambia’s nationalisation experi- ment.

“A refrain in Africa has been that expatriate expertise is not needed, so if they can get that out of their thinking there is a possibility of the country going forward,” he says.

However, a concern among some of the recently-returned copper-mining companies is that, once the mines are running well, the Zambian government might take them back again.

Henderson ascribes the recent success of MCM to successful reinvestment in the copper industry allied to a culture of discipline and hard work.

Name: Mopani Copper Mines

Owner: Glencore International (73,1%), First Quantum Minerals (16,9%) and ZCCM (10%)

Mine type: Underground copper

Locations: Mufulira and Kitwe

Founded: Mufulira 1933Nkana 1932

Current mine life: 20 years

Output: 161 000 t/y

Employees: 16 000

CEO: Tim Henderson