Kansanshi Mine Produced $150million worth of Gold in 2016

First Quantum Minerals (FQM),Zambia leading mining conglomerate.
  • First Quantum Mining Zambia unit Kansanshi produced 120,000 ounces of gold in 2016;
  • Copper Mining output rose to 250,000 metric tons in the same period;
  • The Mine paid out ZMW1.75billion in income and mineral royalty taxes in 2016;

First Quantum Minining Zambia Unit Kansanshi Mine produced around 120,000 ounces of gold worth $150 million in 2016, amounting to about 10% of its revenue and mined 250,000 tonnes of Copper. This is based on Gold spot prices average of US$1,250 per ounce for 2016.

The mine which is part of the First Quantum Minerals (FQM) also confirmed that during that period it paid out ZMW1.75billion income tax and mineral royalty tax. The Mine is one of Zambia’s largest Mine Employers.

“We are a world-class operation in terms of technology, people and operations,” says Assistant General Manager, Meiring Burger. “We face one of the most complex ore bodies in the world, but we mine it by using world-class technology and expertise.

“Our people are always pushing the boundaries and trying out new technology, which is what you have to do when you are mining low-grade copper.” The Mine situated in North-Western province is by far the biggest technological leap in recent years with its new $900-million smelter, which has dramatically boosted its production capacity.

It has an annual production capacity of finished copper anode that ranks it among the top smelters in the world. “Over the years, we have created our own opportunities through investment and innovation,” says Burger. “We need to maintain that investment into the future to extend the life of the mine and to maximize the value of the mineral deposit, but it’s not as simple and straightforward as before.”

Burger notes that many of the major investments that Kansanshi now enjoys the benefits of, were made several years ago, when the mining-investment climate was a lot more favourable. Mineral Royalty Tax was low; sufficient power was available and affordable; the regulatory and policy regime was a lot more stable.

“Under those conditions, it was a lot easier to commit to investment and be sure of a reasonable return. Today, however, there are numerous challenges to overcome, and this affects investment risk.”

The power deficit is the most pressing of these challenges, and currently it constrains the viability of any planned mine or smelter expansion, says Burger. At the moment there are background negotiations with regard to new electricity tariffs that are expected to be around 9.30 per kilowatt of power.

Zambia’s Gold mining numbers are slowly edging upwards. Gold Mining and other important mineral resources such as cobalt are not adequately accounted for with the Ministry of Mines heavy concentration on Copper Production only. There is also currently no regulatory authority or agency in Zambia for the mining industry, a state of affairs that puts into question weather the country’s government is serious with getting a fair share of its rich mineral endowment. The same applies to other precious stones and emerald which have not significantly contributed to the nation’s wealth creation agenda.

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