Charles Carron Brown, Chief Operation Officer, Tiger Resources

MACIG Connect Series

C-Carron-Brown-BLOGCould you start us off with an update on Tiger Resources’ progress over the past few years and an over-view of your current operations?

Charles Carron Brown (CCB): As a company, Tiger Resources lives up to its name – we move fast. The company arrived in 2007 and ac-quired the Kipoi project. Within two years, we had proven up enough of a resource to conduct a feasibility study for a stage 1 heavy media separation (HMS) plant. This came online in 2011, achieved its nameplate capacity in 2012, and exceeded nameplate capacity by 20% in 2013. We were feeding the plant with grades of around 6% copper and producing 20% to 25% copper concentrate that was mostly sold on the local market. This gave us the financial capacity to start developing our stage 2 SX-EW plant, which produced its first cathodes in May 2014. We managed to ramp-up to full capacity in only 11 weeks. In Q4 2014, we averaged over 2,000 metric tons per month (mt/m) of copper. In its current form, we have a predicted mine life of 20 years, although there are several avenues open to us for further development. One advantage that we have is that our plant incorporates the only fully agglomerated heap leach in Africa. Our HMS plant produced two varieties of rejects: a slime that is stored in a temporary slime storage facility, and some coarser particles, which can reach 3% copper. The average grade that most of the open-pit mines in Chile work with is around 0.5%, so the fact that we are working with rejects of 3% is extremely satisfying. Now our aim is to maintain this production level and focus on cutting costs.

Our other two projects are not our main priority at the moment. We are currently awaiting the mining li-cense for Lupoto and expect it to be issued shortly. Our other project, formerly known as La Patience, has been renamed as Sofu after the Sofumwango River.

In the current climate of depressed copper prices, what measures are you looking at to reign in costs?

CCB: Electricity is our highest cost so we are focusing on renovating SNEL’s electrical infrastructure. We are cur-rently installing a 30-Mega Volt Ampere (MVA) substation so as to receive power from the SNEL national grid. As is well known, SNEL does not currently generate enough power to meet demand so we are looking at ways to create power. Rather than installing our own generation capacity, we are implementing power saving strategies. The first of these is a $7.2-million project to replace approximately 900,000 100-watt in-candescent lights with 11-watt fluorescent bulbs. We expect this to save around 50 megawatts (MW). The other issue with power is transmission. At present there is only a weak connection between Kipoi and the network to Lubumbashi and Likasi. We are therefore replacing approximately 240 km overhead power lines. The existing lines can only handle 90 MVA but the new lines will take 120 MVA thus reducing line losses and saving a further 20 MW. This project should be finished by April 2016 but we are on course to receive rough-ly 9 MW to 10 MW from the grid by April 2015. This will ultimately reduce our cash cost by around $0.20 per pound.

To what extent does the DRC live up to its reputation for poor infrastructure and a chaotic business envi-ronment?

CCB: It is foolish to claim that there are no challenges to working in the DRC. There are serious issues to be ad-dressed. Transport costs are prohibitive; even with fuel prices down, we are still paying $250 to $300 per metric ton (mt) to ship to the coast by road. Nevertheless, the situation could be much worse. We are fortunate to have a railway running through our project, which allowed us to export 12,000 mt of concentrate by train in 2014 or 2015. At present, the service is too unreliable to entrust with cathodes, but SNCC is working to improve its operation and once the risk has been reduced we will be able to make better use of its network.

Is there potential to develop a local market for copper cathodes?

CCB: The government has a vision to develop local markets for further processing of copper cathodes, to produce wire products and so forth. However, the majority of the population has no need for copper wire so for now this vision is probably not going to be realized quickly. In the meantime, there are other potential projects that could prove very successful but mostly in the agricultural sector.

Is enough being done to remedy the country’s power supply issues?

CCB: The number one concern for miners now is that the country improves its power supply. Power is the most capital-intensive industry in the world so change will not happen overnight. That being said, we are seeing progress on several fronts. Within two years, we should have a sufficient number of operational hydro units to generate enough power for all of the mining community’s needs. There are five sites along the Luapula River between here and Zambia that will contribute significantly to overall generation capacity, but these will take five years to come online once funding is obtained.

What is your take on the ongoing revision of the 2002 Mining Code?

CCB: As with all the other members of the Chamber of Mines, we are very disappointed that the consultation process has been brought to such an abrupt halt. At present, the Council of Ministers has approved a draft that will be taken forward to Parliament. This is not the same as the version that has been publicized by the media, which was a very early draft amounting to little more than a government wish list. In its current form the bill is less radical but is still unattractive for investment, so we will be lobbying for quite a few changes or ideally for the whole code to be scrapped. Companies already operating in the DRC could probably live with the legislation as it stands, although they would not make any further investment. The only real change would be a hike in royalty payments, but this would have a very negative effect on future investments. Now is not the time to make changes to the law. Once we have resolved the pressing issues of power and logistics, it might be more appropriate for revisions.

Amid all the challenges, do you see much appetite for projects in the DRC?

CCB: Since 2000, total copper production in the DRC has risen from 30,000 mt/y to 1 million mt/y. There has been huge growth in the appetite for mining projects here. All of this took place under the existing mining code, which goes to show that if conditions are right investors will come. The lesson to be learned is that we should not be shaking up those conditions.

This interview was part of research being conducted by GBR for its upcoming Mining in Africa Country Investment Guide (MACIG) 2016. To participate in this report, please contact Molly Concannon at mconcannon@gbreports.com or +243(0)826300684.

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