HomeBase MetalsLCM needs US$65 million cash injection

LCM needs US$65 million cash injection

Luanshya copper mine 
Lusaka, Zambia — MININGREVIEW.COM — 15 July 2009 – Zambia’s newly re-opened Luanshya Copper Mines (LCM) needs a cash injection of $65 million (R520 million) to put the company in a position to assume full smelting and production of copper concentrates and cobalt.

Revealing this in a statement issued here, finance minister Situmbeko Musokotwane said that US$20 million (R160 million) would go towards mine development and start-up, US15 million (R120 million) was needed as working capital, and US$30 million (R240 million) would be used for financing the operating loss.

In May, the Zambian government announced the sale of 85% of LCM to China Nonferrous Metals Mining, commonly known as NFC Africa. The company had been temporarily closed as it had struggled to make money due to lower metal prices.

Reuters reports that LCM was initially earmarked to resume production in May, but management now says operations will start in six months time after the mine has been re-developed.

Musokotwane said that LCM would employ more than 3 000 people when fully operational over a three-year period with the launch of its Mulyashi operation, which has yet to be developed.

LCM shut down the Baluba copper mine and abandoned the development of the 60 000 tonnes per year Mulyashi project last December, saying it had been making losses because of low global metals prices and other effects of the global economic crisis.

The company “’ which was a joint venture of the Bein Stein Resources Group (BSRG) and International Mineral Resources (IMR) “’ also shut down the Chambishi Metals Plc, Zambia’s largest cobalt producer, and retrenched 1 700 miners.