Johannesburg, South Africa — MININGREVIEW.COM — 28 February 2012 – African Rainbow Minerals (ARM) will have spent US$6.5 billion on capital projects in 10 years by 2014, and has earmarked US$500 million to more than double production at its Konkola copperbelt project in Zambia with its joint venture partner, Vale.
“It’s only a thumb-suck, but I suspect we could spend US$6.5 billion with our partners on growth projects,” said ARM executive chairman Patrice Motsepe at the group’s half-year results presentation which showed a 24% increase in headline earnings to R1.94 billion.
“It’s a rough number but the growth is imperative.” Some R9.9 billion would be spent on capital expenditure between 2012 and 2014. A further R8.9 billion would be spent by ARM’s partners over the same period.
Already, some 80% of capital allocated to the US$400 million development of Konkola North had been spent, and production was likely from December. A further US$500 million could be deployed to expand the project.
In an interview with Miningmx after the results briefing, outgoing CEO André Wilkens said copper production from Konkola’s Area A, which is south of current operations at Konkola North, could see the mine produce at least 100,000tpa of copper from the current 45,000tpa that is planned at Konkola North.
“A year from now we could make a decision and start moving,” said Wilkens on the possibility of sinking a 1.2km vertical shaft into Area A’s ore body, which he described as flat and twice the grade of current operations. “We could go to 100,000tpa or slightly better,” Wilkens added. “There is no doubt that we will mine there. We’re extremely excited about Area A,” he said.
ARM was also “putting machines” on additional exploration properties in Zambia, for which it expected to be awarded exploration licences shortly.
In a growth-focused, outward-looking introduction to ARM’s interim results, Motsepe said that many of the political issues that had dogged the South African mining sector over the past few years were now over. He was partly referring to calls by the ANC Youth League for nationalisation of the mining industry – an issue that Motsepe initially tacitly supported.
Motsepe has since distanced himself from nationalisation and said: “We’ve always said that nationalisation is not an option.” However, he added that it had been necessary to give nationalisation an airing because he “believed in democracy”.