Post date: Oct 15, 2010 12:40:41 PM
Zambia's hopes to double mining contribution towards its GDP saw a boost with Brazilian mining giant, Vale, and African Rainbow Minerals planning to invest 1 billion U.S. dollars in the Konkola North Copper Mines over the next five years.
CHILILABOMBWE, ZAMBIA (OCTOBER 14, 2010) REUTERS - Brazilian mining giant, Vale, and African Rainbow Minerals (ARM) plan to invest 1 billion U.S. dollars in Zambia's Konkola North Copper Mines over the next five years.
Vale, which is in a joint venture with ARM of South Africa, is expected to initially spend 400 million U.S. dollars on the first phase which will see the mine produce 45,000 metric tonnes of copper in concentrate annually.
Zambia aims to double the contribution of mining to gross domestic product by 2015 by attracting greater investment in the sector. Zambian president Rupiah Banda said in a statement that Zambia, Africa's top producer of copper, aims to have mining contribute 20 percent of GDP by 2015. That compares with an 11 percent contribution from mining to GDP now, according to ministry of mines data.
Banda headlined the groundbreaking at Konkola on Thursday (October 14) at the site where the mine is to be constructed and operational by 2012.
Investors say it will create 1,500 jobs in the construction phase and another 1,500 when it is fully operational.
ARM Executive chairman, Patrice Motsepe said the investment in Zambia would be leveraged by Vale's extensive track record in developing successful large scale mining projects in tropical environments.
"We will be spending 400 million dollars over the next 2 years as part of phase 1 in this area. The plan is to spend in excess of 500 million two to three years from now to expand our operations here in Zambia. In terms of our projections we anticipate spending close to a billion U.S. dollars in the next three to five years in this area," said Motsepe.
Motsepe said the project was also consistent with their goal of becoming one of the largest copper producers in the world.
Konkola North is ARM's first venture on the African continent outside South Africa, as well as its first venture into copper.
Banda emphasized the need for investors to prioritise the safety of the miners to reduce unsafe operations, drawing examples from the Chilean miners freed after being trapped for the longest time in mining history.
"It was so, so touching to see the last person emerge from the ground. We do need further and further investment in our mines. We need to take care of these mines so that we dont go through the experience that our brothers and sisters in Chile went through and may God bless them and we thank God for bringing back all those people.... if there is any event that has touched humanity in the recent few months this is one event that I am sure all of us have sat up all night to watch," Banda said.
Vale president and chief executive officer, Roger Agnelli said his firm would also be paying much attention to environment safety to avoid liabilities in future.
"We need to take care of the environment because this is in order to avoid liabilities in the future. Because I see a lot of miners and they say let's go there and the first issue is, the first goal is money, profit. What we think that is the correct way to act in a country, in a place, in a community to take care of the community is to support the local government, support the central government, this is important and we care about the environment," Agnelli said.
The Konkola North Copper Mines has an expected life of 28 years but the joint venture partners have started a further three-year exploration area that could potentially double output to 100,000 tonnes per year of copper concentrate.
Foreign mining companies in Zambia include London-listed Vedanta Resources, Canada's First Quantum Minerals, Equinox Minerals and Glencore International of Switzerland.