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Zambia to select new Luanshya investor

Luanshya copper mines
in Zambia
Lusaka, Zambia — MININGREVIEW.COM — 04 May 2009 – The government of Zambia is to select a new investor for Luanshya Copper Mines (LCM) this week, having received bids from India’s Vedanta Resources plc, China’s NFC Africa and two local companies.

Mines minister Maxwell Mwale revealed here that London-listed Vedanta, NFC Africa and local firms Exco Corporation and Luanshya Minerals Resources had submitted offers for LCM before the Thursday deadline. Vedanta already operates Zambia’s largest copper producer, Konkola Copper Mines, and NFC Africa operates the Chambishi copper mine.

“Our technical committee is currently evaluating the bids and we hope that by the coming weekend we should come up with the name of a company to open negotiations with,” Mwale told Reuters. He said the two local firms had partnered with big global mining companies, but declined to give further details.

The successful bidder will be offered 75% equity in LCM.

LCM shut down in December after its owners had revealed that its Chambishi Metals Plc and Baluba copper mine units had been making losses due to lower metal prices and the effects of the global financial crisis.

The former owners of Luanshya Copper Mines – Bein Stein Group Resources (BSGR) and International Mineral Resources (IMR) – suspended the new Mulyashi copper project, which had been expected to start producing 60 000 tonnes copper by 2010.

Mwale said in February the UK’s Lion Finance and South Africa’s Shanduka Group had been potential contenders for LCM, but he has not revealed what had happened to that initial interest.

Officials familiar with the Luanshya mine say the Zambian government expects an enterprise value of at least US$230 million (R2 billion) for the operation.