Brazil's Vale Seeks Copper Treatment Deals With Zambian Smelters
07.09.10, 13:54 Uhr
Brazilian mining major Vale SA (VALE), is in talks with at least three Zambian mining companies to secure deals for the treatment of copper concentrates from its Konkola North Mine, which is expected to come onstream in 2013, a government official said Tuesday.
Vale together with its partner in the Konkola North project, African Rainbow Minerals Ltd. (ARI.JO), are in talks with Konkola Copper Mines PLC (KONKOLA.ZA), Mopani Copper Mine and the Chinese-owned NFC Africa Mining PLC to secure copper treatment deals, an official at Zambia's Ministry of Mines and Minerals Development told Dow Jones Newswires.
"Vale officials approached the three companies last month and talks are continuing," the official said.
Zambia is Africa's largest copper producer.
Company officials wouldn't comment immediately.
KCM, a unit of London-listed Vedanta Resources PLC (VED.LN), owns the 300,000 metric tons-a-year Nchanga Smelter, Zambia's largest copper smelter. Mopani, majority-owned by Swiss commodity trader Glencore International AG, operates the Mufulira Smelter, and NCFA, a unit of China Nonferrous Metals Co. (8306.HK), owns the Chambishi Copper Smelter.
Last month, Vale said construction of the $400 million Konkola North project had started, and that the mine was expected to begin production in 2013 and reach commercial levels by 2015. The company estimates Konkola North's nominal copper production capacity at 45,000 tons a year of copper in concentrate, which will be smelted in Zambia.
In 2008, Zambia introduced a 15% export levy on unprocessed copper concentrates to encourage companies to utilize Zambian smelters. Konkola North Copper Mines is expected to have a lifespan of at least 28 years, including a three-year exploration program to evaluate area A, which has the potential to increase output to 100,000 tons a year of copper in concentrate from 2020, according to company data.
According to government officials, Vale is expected to employ at least 3,000 miners when it starts production. Hundreds of workers have already been hired to kick start mine development.
Vale's plans to invest in Zambia were in July challenged by miners' unions which urged the government to take action over the investment saying that Vale hasn't been respecting labor laws at its operations in Canada, a charge denied by company and government officials.
Sikufela Mundia, the president of National Union of Miners and Allied Workers told Dow Jones Newswires that union representatives hadn't been consulted on plans by Vale to develop the mine as well as its recruitment policy.
"We have presented our concerns to government regarding the company's labor policies, surprisingly, they have not consulted us on anything," he said.
However, according to Maxwell Mwale, Zambia Mines and Minerals Development minister, the government expects Vale to respect the country's labor laws.
"Vale is the second largest mining company in the world, the fact that it has just had problems at its Canadian unit doesn't mean that it should be prevented from investing in Zambia," he told Dow Jones Newswires last month.
"Vale officials approached the three companies last month and talks are continuing," the official said.
Zambia is Africa's largest copper producer.
Company officials wouldn't comment immediately.
KCM, a unit of London-listed Vedanta Resources PLC (VED.LN), owns the 300,000 metric tons-a-year Nchanga Smelter, Zambia's largest copper smelter. Mopani, majority-owned by Swiss commodity trader Glencore International AG, operates the Mufulira Smelter, and NCFA, a unit of China Nonferrous Metals Co. (8306.HK), owns the Chambishi Copper Smelter.
Last month, Vale said construction of the $400 million Konkola North project had started, and that the mine was expected to begin production in 2013 and reach commercial levels by 2015. The company estimates Konkola North's nominal copper production capacity at 45,000 tons a year of copper in concentrate, which will be smelted in Zambia.
In 2008, Zambia introduced a 15% export levy on unprocessed copper concentrates to encourage companies to utilize Zambian smelters. Konkola North Copper Mines is expected to have a lifespan of at least 28 years, including a three-year exploration program to evaluate area A, which has the potential to increase output to 100,000 tons a year of copper in concentrate from 2020, according to company data.
According to government officials, Vale is expected to employ at least 3,000 miners when it starts production. Hundreds of workers have already been hired to kick start mine development.
Vale's plans to invest in Zambia were in July challenged by miners' unions which urged the government to take action over the investment saying that Vale hasn't been respecting labor laws at its operations in Canada, a charge denied by company and government officials.
Sikufela Mundia, the president of National Union of Miners and Allied Workers told Dow Jones Newswires that union representatives hadn't been consulted on plans by Vale to develop the mine as well as its recruitment policy.
"We have presented our concerns to government regarding the company's labor policies, surprisingly, they have not consulted us on anything," he said.
However, according to Maxwell Mwale, Zambia Mines and Minerals Development minister, the government expects Vale to respect the country's labor laws.
"Vale is the second largest mining company in the world, the fact that it has just had problems at its Canadian unit doesn't mean that it should be prevented from investing in Zambia," he told Dow Jones Newswires last month.
DJG/dok
