First Quantum Minerals Plans $1 Billion Zambian Copper Mine Expansion

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Researched by Industrial Info Resources (Sugar Land, Texas)--A $1 billion investment in a new Zambian copper mine is part of First Quantum Minerals' (TSX:FM) (FQM) (Vancouver, British Columbia) expansion drive, which will see $2 billion invested globally from 2011 to 2014.

In the last week of January, the new $1 billion Trident copper mining project at Kalumbila was launched by FQM. The greenfield project will have a production capacity of 300,000 tons per year when fully commissioned in 2014. According to Clive Newall, the president of FQM, it will create 2,000 jobs and see the creation of an airport, a smelter, and a multi-facility economic zone, and it will connect Zambia's western corridor with the neighboring southern and central African countries of Angola, Botswana and Namibia. The mine project, which will be the largest single producer of copper in Zambia, also will drive development infrastructure, including new power generation capacity and transmission, and will boost domestic electrification in the rural areas of the region.

Expansion is under way at the company's Kansanshi copper operation at Solwezi, which will raise the current annual production of 250,000 tons of copper per year to 450,000 tons per year by 2015. In Phase I of the expansion, which is scheduled for completion by the end of this year, $40 million is being invested and production will be raised to 285,000 tons per year. The focus will be on expanding the treatment capacity of the oxide circuit by about 20% to 8.5 million tons, which will allow the mixed and sulphide treatment circuits as required in this phase. The project will use some equipment from the company's Bwna Mkubwa mill operation, which has been closed down.

The $350 million Phase II will begin in 2012 with the construction of a new concentrator that will have an annual throughput of 25 million tons per year. This will bring annual copper production up to the targeted 400,000 tons being put into a drilling program. A further $16 million is being put into a drilling program at Kansanshi in 2011.

Drilling is continuing at the Sentinel deposit, which has an estimated ore resource of at least 700 million tons with a grade of 0.65% to 0.80% copper. With an annual processing rate of 40 million tons of ore, annual production could be 250,000 tons of copper. If the current assessments are correct and the necessary permitting processes are completed, initial design and construction could begin in 2011; with a total investment of about $1 billion, including infrastructure, commercial production could begin in 2014.

In addition to the Zambian projects, FQM is working on global development, including the Haquira copper deposit in Peru, the Ravensthorpe nickel project in Australia, the Kevitsa nickel-copper-PGE project in Finland, and the Guelb Moghrein copper and gold mine in Mauritania, northern Africa.

"While we continue this (global) growth and diversification strategy, our long-term commitment to Zambia remains central in the company's future," said Philip Pascall, the chairman and chief executive officer of FQM. "Our plans for expansion at Kansanshi, the development of Sentinel, and the construction of a new smelter at Solwezi, with a total investment of almost $1.5 billion, demonstrate the strength of that commitment to the government and people of Zambia."

With Kansanshi and the newer projects in the Solwezi region, it makes sense to have a local smelter, rather than send concentrate 250 kilometers to smelters on the established Zambian Copper Belt, which is what is currently being done. Also, limited smelter capacity sometimes makes it necessary to sell copper concentrate to third parties for export.

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