What it takes to operate two of Zambia’s most prominent mines.
EM: The two mines were delivering around 100,000 mt per year of finished copper under ZCCM ownership, although at the time of privatization it had declined to 50,000 mt per year. Mopani took over operations in April 2000 and at that time the fixed infrastructure costs were too high to be absorbed by the existing level of production and the decline in copper prices to $2,000 per mt was one of the compelling factors behind privatization. Before privatization the ZCCM was losing almost a million dollars per day. We therefore needed to invest heavily to raise production and by 2005 it was up to 130,000 mt per year copper, where it has remained. To replace the smelter at Mopani in 2005, we had to invest $245 million, $61 million of which was needed to build a new sulfuric acid plant. Our agreement required us to start addressing the environmental legacy of sulfur dioxide emissions of which the original plant was emitting 100% into the atmosphere. Mopani committed to achieving 95% capture by June 2015, which we have brought forward to December 2013. The mines currently have 111 million mt of proven reserves, which would give us 20 more years of mining. The new $323 million synclinorium shaft that is to be commissioned by mid-2015 will access another 119 million mt of copper and will add an additional 25 years of operations at Nkana. Mopani’s exploration work proceeds continuously.
With renewed focus on localization initiatives in Zambia, how many people does Mopani currently employ and how many of these are expatriates?
EM: Mopani has increased its workforce from 11,000 in 2000 to 18,500 today. 50% of these employed directly, while the other 50% are employed on contract basis. Mopani takes into account that for every miner in the Copperbelt, there are eight direct dependents and an additional six indirect dependents. Only about 95 of our direct employees are expatriates, which gives us one of the lowest proportions of expatriates employed in the industry.
Can you elaborate on the community uplift programs Mopani has at its two mines?
EM: Mopani currently runs two hospitals with a combined capacity of 400 patients in the area and our miners and their immediate families receive free medication. Our hospitals are the only two hospitals in Central Africa to be ISO-certified and now are accredited to BUPA. We have run a highly effective malaria program since 2001 in the Copperbelt, seeing the incidence rate of malaria drop from 258 people per thousand to 14 per thousand. Mopani also runs an HIV/AIDS program that was initiated in 2007. We currently have 7,400 patients on antiretroviral treatment and we carry this cost even though 85% of the patients do not work directly for Mopani. Mopani has also spent $500,000 establishing cervical cancer screening facilities, free and available to all women. Recently we resurfaced two roads of a combined 29km length, at the expense of $10.5 million. We have also improved the miners’ living quarters, which were built in the early 1950s with only one ablution facility per four houses, giving rise to typhoid. In 2011 constructed 1,667 individual toilets, one for each house, at cost of $4.5 million and have managed to eradicate typhoid in the area. Of course, we want to leave a positive legacy in the long term and therefore Mopani also runs four schools, with 2,000 pupils, half of who are the children of miners and we are proud to boast 100% exam pass rates. The quality of these schools is very high and there are a further 1,600 children on their waiting lists.
What are your goals for the next five years?
EM: Mopani should be able to reach a production level of about 140,000 mt per year of finished copper, with a corresponding reduction in unit cost of at least 20%. If we did not sink the new shaft we would face the closure of facilities by as early as 2014, which would put 3,000 miners out of a job. Instead, we are employing an extra 500 people in construction and will be able to maintain a stable operating workforce for the next 25 years. The future is still bright in Zambia. Only 60% of its known mineralization is well explored, so the country needs more investment in exploration. Although it is an expensive activity, Zambia’s current fiscal regime is conducive for exploration. Copper remains the most important mineral and magnetic surveys show that it is still spread all over the country.
This interview was conducted as part of GBR’s research on the Copperbelt Mining Region of Africa, to be published in Engineering and Mining Journal. To participate in this report, please contact Jolanta Ksiezniak at firstname.lastname@example.org. To view related articles, please see:
Mining Finance Africa: Great Challenges and Great Expectations / Africa Mining Indaba & Mozambique: Africa’s Next Mining Hub? / African Exploration: Accessing Finance in Challenging Markets / Mining in Zambia: Aiming toward a more Transparent and Equitable Distribution of Wealth