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First Quantum Minerals reports stable power supply to its Zambian operations

Zambia – First Quantum Minerals said on Monday that the Zambian power situation is stabalising enough that it anticipates its Sentinel copper mine, in Zambia’s North Western province to begin commercial-level production by the end of the year.

Sentinel, which has been in construction by First Quantum Minerals since June 2012, will produce between 280 000 and 300 000 tpa of copper at full production from a large low-grade ore body containing 0.51% copper.

Sentinel’s ramp-up to date has been affected by the limited power supply. Despite this, good progress has been made. One power line, supplying 55 MW is currently connected and supplying power to the Sentinel mine while construction of the second power line connecting Sentinel to Lusaka West is complete and scheduled to be energized shortly.

Once the second power line is connected and energized, Sentinel will be entitled to its full power requirement of 160MW. This will allow for the mine to ramp-up towards commercial-level production expected by the end of 2015.

Further, full power of 153 MW is currently being provided to First Quantum Minerals’ other Zambian operation – the Kansanshi mine and smelter.

ZESCO, the state-run power company, has requested the mining industry to use supplementary power for 30% of their requirements. Discussions are currently underway regarding the related tariffs for this supplementary power. First Quantum Minerals expects full production at both Kansanshi and Sentinel through the purchase and sharing of this power.

It is also expected that the country’s generating capacity will improve following the rainy season starting in November. In addition, approximately 400 MW of new power generation capacity is expected online in Zambia in 2016 from projects nearing completion – which includes 300 MW thermal and 100MW hydro power.

Meanwhile, in response to low commodity prices, market volatility and power shortages to its Zambian operations, First Quantum Minerals has taken steps to protect itself in the current market conditions, says First Quantum Minerals Chairman and CEO Philip Pascall.

“Our focus has been clear. It is first to ensure that profitability and cash flow from our mining operations are maximized and protected in these volatile market conditions and sustained lower commodity prices and second, that cash outflows are limited to essential and economically attractive projects so that our balance sheet integrity is maintained.

“Additional initiatives to further strengthen the balance sheet are being prioritized and are under active review.

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