Hi Pete,
Here is another news release that may seem unrelated but emphasizes the concerns the larger companies are having with JV's in this part of the world (these include PD and Noranda). Until they have a finalized deal with financing, we will not see the price move up as we would like.
John
Anglo says ZZCM woes overhang Konkola
By Darren Schuettler
JOHANNESBURG, June 3 (Reuters) - Mining giant Anglo American Corp of South Africa Ltd (AACJ.J) has said its final commitment to the Konkola
Deep copper project in Zambia would depend on financing and the privatisation of largely state-owned Zambia Consolidated Copper Mines Ltd (ZCC.PA)
(ZCCM) (ZCC.PA).
Anglo American, and its subsidiary Zambia Copper Investments Ltd (ZCIJ.J) (ZCI), are in the midst of a feasibility study on Konkola, one of several
projects Zambia is counting on to revive its struggling copperbelt.
''The Anglo/ZCI review of the Konkola Deep mine project is coming to a conclusion and while the results look encouraging, there remain a number of
conditions which we feel must be satisfied,'' Bobby Danchin, head of Anglo's new mining business division, told analysts at a results presentation on
Tuesday.
''Not least the raising of third-party finance on acceptable terms and the conclusion of the privatisation of the rest of ZCCM before a final commitment is
made,'' Danchin said.
Zambia's bid to privatise ZCCM suffered a major blow in April when talks to sell the country's two biggest copper mines, Nkana and Nchanga, to a foreign
mining consortium collapsed.
The Kafue group has been negotiating to buy the mines for the past 15 months, but could not agree with Zambian officials on a price. Last week, two major
Kafue partners, Canada's Noranda Inc (NOR.TO - news) and U.S.-based Phelps Dodge (PD - news), left the consortium in frustration.
The remaining partners, South Africa's Avmin Ltd (AVMJ.J) and the Commonwealth Development Corp (CDC), said on Monday they would seek to renew
talks with the Zambian government.
Anglo American, which holds a 27.3 percent stake in ZCCM through its ZCI subsidiary, has said any delay in ZCCM's privatisation would be a serious
concern.
The initial plan for Konkola Deep mine was for output of around 180,000 tonnes of finished copper a year which could increase to 340,000 tonnes.
The mine resources are estimated around 340 million tonnes at 3.8 percent copper content. The estimated development cost was between $700 million and
$800 million.
The Konkola project has lost partners as well, the latest departure coming in March when Canada's Falconbridge Ltd (FL.TO - news) left due to weak
copper prices.
At the time, Anglo said it would continue the feasibility study and might seek other partners.
ZCCM's problems aside, Danchin said Konkola was one of two copper/cobalt projects in the region with ''enormous potential.''
In neighbouring Democratic Republic of the Congo, Anglo is co-leader of a consortium hoping to rehabilitate a 22,000 sq km area near the mining centre of
Kolwezi.
The Kolwezi Group West project would involve reviving large open pits and dumps in the mineral rich central African country.
''Its difficult...to overstate the enormous potential of these copper-cobalt deposits, which, at Group West alone, have the capacity to produce 400,000
tonnes of copper and 15,000 tonnes of cobalt annually for well over 20 years,'' Danchin said.
The other consortium partners include Belgium's Union Miniere (ACUM.BR), Billiton Plc (quote from Yahoo! UK & Ireland: BLT.L), South Africa's Iscor Ltd
(ISCO.J), Canada's First Quantum Minerals (FM.V - news) and a Chinese partner.
The Konkola and Kolwezi projects are part of Anglo American's drive to expand further into Africa.
''Africa to the north of us has the geological credentials to produce world class mines similar to the ones that have been so important to the development of
southern Africa,'' Danchin said.
In the search for new projects, Anglogold Ltd (ANGJ.J) recently linked up with Canada's Barrick Gold Corp (ABX.TO - news) to search for gold in the
Democratic Republic of the Congo, Mali and Senegal.
The most advanced of these gold properties is a 57,000 sq km concession in Congo Republic's Kilo-Moto area, which Danchin said is producing attractive
drill results.
In Tanzania, Anglo is well into the first year of a two-year feasibility study on the Kabanga nickel project, in which it holds a 60 percent stake in a joint
venture with Canada's Sutton Resources.
Danchin said the Kabanga North ore body could see an underground mine producing 100,000 tonnes of concentrate annually containing 15 percent nickel,
1.2 percent cobalt and 2.5 percent copper with a mine life of 14 years.
More Quotes
and News:
Barrick Gold Corp (Toronto:ABX.TO - news)
Falconbridge Ltd (Toronto:FL.TO - news)
First Quantum Minerals Ltd (Vancouver:FM.V - news)
NORANDA INC (Toronto:NOR.TO - news)
Phelps Dodge Corp (NYSE:PD - news)
Related News Categories: IPOs, US Market News, international |
