Equinox signs Lumwana mine copper concentrate sale deal
2007-02-15 10:38 ET - News Release
Mr. Craig Williams reports
EQUINOX SIGNS FIRST LUMWANA CONCENTRATE OFF-TAKE IN 5-YEAR AGREEMENT WITH NEW CHAMBISHI COPPER SMELTER
Equinox Minerals Ltd.'s wholly owned subsidiary Lumwana Mining Co. Ltd. and Chambishi Copper Smelter Ltd., a joint venture between China Nonferrous Metal Mining (Group) Co. Ltd. (CNMC) and Yunnan Copper Industry (Group) Co. Ltd. (YNCIG), have signed a concentrate sale and purchase agreement for about 55 per cent of the copper concentrates to be produced by the Lumwana mine during the initial five years of production.
The agreement is a five-year take-and-pay contract which commences from Lumwana commissioning scheduled from July 1, 2008. The annual commitment to Chambishi will be 100,000 tonnes of copper contained in concentrates, which equates to approximately 230,000 tonnes per year of Lumwana concentrates. Chambishi will charge Lumwana copper treatment and refining charges to be determined annually based on global benchmark terms.
The Chambishi copper smelter is a new Zambian partnership between CNMC (60 per cent), which has been operating the Chambishi copper mine since 1998, and YNCIG (40 per cent), currently China's third-largest copper producer and smelter operator. Construction of the Chambishi copper smelter commenced in December, 2006, and will use ISAsmelt technology which is a proven technology in the copper smelting industry and one which YNCIG uses in China. The smelter is expected to begin production in late 2008 and produce 150,000 tonnes of copper metal per year.
Lumwana, owned 100 per cent by Equinox, is located in the North Western province of the Republic of Zambia. The Lumwana mine will produce an average of 169,000 tonnes of copper metal per year contained in concentrates for the first six years of its 37 year mine life and construction is on schedule for commissioning in second quarter 2008.
Commenting on signing the agreement, Craig Williams, Equinox president and chief executive officer said: "This concentrate offtake agreement represents the coming together of two important new projects underpinning the growth of the copper industry in Zambia. It also cements a strong international alliance between Zambia and the sponsoring companies from China and Canada/Australia. The agreement is of particular significance to Equinox, securing offtake commitments for a substantial portion of Lumwana's concentrate for the critical first five years of production. We look forward to forging a strong operating relationship between CNMC, YNCIG and Equinox."
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