HomeBase MetalsZambia and DRC sign cobalt deal

Zambia and DRC sign cobalt deal

Zambia’s largest cobalt producer – Chambishi Metals Plc – has agreed cobalt concentrate supply deals with some mines in the Democratic Republic of Congo (DRC), and is scheduled to resume operations later this month.

CEO Derek Webbstock revealed in Luanshya that Chambishi – whose operations had been placed under care and maintenance in December, and had been scheduled to resume in July – would delay re-starting output until some mines in the DRC had begun to deliver cobalt concentrates.

He said Chambishi – which had forecast output of 3 400 tonnes of cobalt in 2009 from 2 500 before it suspended operations last December – would first stockpile the cobalt concentrates before starting operations.

“We have concluded some negotiations and the suppliers have committed to deliver the concentrates, but we are still waiting to conclude others,” Webbstock explained.

He pointed out that some negotiations with DRC mining firms had taken longer than anticipated. Chambishi – which was previously owned by Luanshya Copper Mines (LCM), a joint venture of Bein Stein Group Resources (BSGR) and International Mineral Resources (IMR) – is now owned by Enya Holdings of the United Kingdom.

The ownership of the company changed after China Nonferrous Metals Corporation (CNMC) had acquired an 85% stake in LCM in June.

Before shutting down, Chambishi had intended to spend US$354 million (R2.9 billion) to develop the Mulyashi copper project, which was forecast to produce 60 000 tonnes of copper cathode by 2010. The company had also planned to raise cobalt output to 5 000 tonnes in 2008 from about 3 000 tonnes in 2007, before halting operations because of the global economic crisis.

In early June, China’s Non-ferrous Metals Corporation was awarded the right to run the Luanshya copper mines, and pledged to invest US$400 million (R3.2 billion) to revamp the operations

Meanwhile it’s been announced that the Baluba copper mine in Zambia – a unit of LCM – is to resume operations in December once its owners have completed rehabilitation work and replaced obsolete machinery.

Revealing this in Luanshya, Sydney Chileya – the spokesman for NFC Africa, a subsidiary of CNMC, which has control over Baluba mine – said US$60 million (R480 million) was being spent on upgrading the mine. “After the machinery has been replaced and upgraded, underground development at Baluba should start in readiness for the resumption of production by December,” Chileya added.

“Spending of the initial US$60 million (R480 million) will start this month, and we are confident that this cash injection will bring the mine back into production,” Chileya said.

LATEST FEATURES