Chibuluma Mines Extract from 2019 Annual Report

Revenue for the financial year ended 31st December 2018 was US$65.8 million (2017: US$70.3 million). Net loss over the period under review was US$17.95 million (2017: profit of US$7.03 million).
The decrease in revenue is attributed to factors including lower payable contained Copper produced, finalisation of invoices at lower Copper prices than provisionally invoiced, lower grade of Copper mined through the crown pillar ores and limited third party ore for production. The decrease in Net profit for the period was attributable to the asset impairment of US$24.5 million following the completion of the 2018 statutory financial audit and an impairment review of mine assets completed by Jinchuan Head Office and Deloitte. The Chibuluma South ore reserve continued to be depleted during the year with life of mine now only 2 years. In 2018, the company continued its survival plan through higher recoveries from crown pillar mining. The company continues to stockpile this ore with the aim for further tests on how best it should be processed. Through Lufwanyama Mining Manufacturing and Trading Services Limited (LMMTS), a subsidiary of CMP, exploratory work is being carried out in North-Western in line with the company’s survival plan. No dividends were paid for the financial year ended 31st December 2018 (2017: nil).

Chibuluma Ninth Best Copper Mine in World – Report

Zambia is among the world’s ten topmost producers of copper with Chibuluma Mine being on the ninth position in the world, according Mining for Zambia website.

The website says Chibuluma Mine on the Copperbelt province which has an average copper grade of three percent, is a shining example of a well-run, profitable enterprise.

“ Chibuluma, which is a relatively small mine by Zambian standards, has paid over $100 million in tax since 2007, and has had one fatality in eight years,” it adds.

The website says although only one Zambian mine makes its list, as the country’s copper grades are generally reduced after many decades of mining.

Modern Zambian mining operations have become highly efficient, to make do with reduced ore grades, and remain a major contributor to the country’s economy and exports.

The average growth of the Zambian mining industry between 2017 and 2021 is expected to be about 5.5 percent, meaning that the sector will continue to be a vital contributor to employment and the broader economy.

Topping the list is Sudbury (also known as Victoria) mine in Canada, North America where the grade of ore is nearly eight percent.

The underground mine is found in a unique geological area, caused by a meteorite crashing into earth nearly 2 billion years ago. One of Sudbury’s main shareholders is KGHM, which has its roots in a Polish state mining company.

Las Cruces Copper mine in Spain owned by First Quantum Minerals (FQM), which operates a number of mines in Zambia is second. Average copper grade at this opencast mine is five percent. Operations began in 2009 and are expected to continue until 2022.

Thanks to innovative technology at the mine, copper cathode produced at the mine is very pure. According to FQM, copper cathode produced at this mine reaches a maximum quality of 99.9 percent copper.

The Kinsenda mine in the DR Congo is third recognised. The mine is very close to Kasumbalesa, a town on the Zambian border, and is owned by a South African company, Metorex.

The average grade of copper at this mine is 4.8 percent. It is another underground mine and operations are expected to continue until 2025.

Fourth recognised is Degrussa Coppermine in Australia, and CSA mine also of Australia on the fifth position while Kinsevere open-pit Coppermine owned by MMG.in neighboring, DRC takes sixth position.

KOV Coppermine which is an opencast mine and is the largest high-grade copper operation in the world takes is seventh recognised. Its primary shareholders are Glencore and Gécamines, the Congolese state-owned mining company. The average grade of copper at KOV is 4.2 percent.

Kinsevere Coppermine also of the DR Congo and Reed Coppermine in Canada are seventh and eighth recognised copper mines in the world, respectively according to the website.

According to the same website, the copper mine with the tenth-highest grade of copper in the world is found in southern Laos, a country in south-east Asia

Source: Zambia Reports

Zambia’s copper production rises to 861,946 tonnes in 2018

Zambia has recorded a marginal increase in its copper production for 2018 to around 861,946 metric tonnes from 799,329 tonnes recorded in 2017, boosted by First Quantum Minerals’ (FQM) operations in Kalumbila District.

But last year’s increased copper output still means that Zambia remains Africa’s second-biggest producer of the red metal, with the Democratic Republic of Congo (DRC) expected to hit over 1.2 million metric tonnes.

According to the official Ministry of Mines data, Zambia’s total copper production last year marginally rose to an estimated 861,946 tonnes from 799,329 tonnes recorded in 2017.

The total copper production included all of the country’s 10 large scale mining operations as well as small-scale mining operations, which accounted for at least 10,859 metric tonnes from the total tonnage.

Data reveals that although FQM’s Kansanshi Mining Plc recorded a marginal drop of 249,532 tonnes last year from 250,803 tonnes in 2017, its output in 2018 was the highest among all 10 mining companies in the country for a third successive year.

Additionally, Ministry of Mines Permanent Secretary Paul Chanda explained that FQM’s Sentinel Copper Mine in Kalumbila District produced record output of 223,655 metric tonnes, which helped contribute to Zambia’s overall copper production increase.

“The performance of the sector was better in 2018 relative to 2017. The increase in copper production is attributed to: i. The ramp-up in production at Kalumbila; ii. Improved plant availability and utilization at the Tailings Leach Plant at KCM coupled with higher grades; iii. Commissioning of the Synclinorium Shaft at Mopani in Kitwe has increased volume of ore being hoisted,” Chanda explained in a statement released, Wednesday.

Both Kansanshi and the Sentinel’s copper output last year constitute for 473,187 tonnes out of the country’s total production or nearly 55 percent from just two operations.

And 6 other mining companies equally recorded upward copper production output last year.

These included: Mopani Copper Mines, whose output hit 62,191 metric tonnes from 44,860 tonnes in 2017; Konkola Copper Mines (KCM), whose output rose to 93,165 tonnes last year from 84,436 tonnes in 2017; Chibuluma Mines, who recorded 11,258 tonnes in 2018 from 10,194 tonnes in 2017; CNMC Luanshya, whose output increased to 50,363 tonnes last year from 43,206 tonnes in 2017 and Sino Metals, who recorded 9,312 tonnes from 7,100 tonnes, while Lubambe’s copper production hit 22,074 tonnes from 18,037 tonnes during the period under review respectively.

On the other hand, Barrick Gold’s Lumwana Copper Mine saw its output fall to 101,890 tonnes last year from 116,170 tonnes in 2017, while NFCA recorded 27,644 tonnes down from 27,706 tonnes during the period under review respectively.

But Zambia’s increased 2018 copper production still means that the country remains Africa’s second-biggest producer of the red metal, with the DRC expected to hit over 1.2 million metric tonnes.

The DRC first managed to surpass Zambia as the continent’s biggest copper producer after that country managed to produce over 900,000 metric tonnes of copper in 2013, registering a sharp rise and surpassing Zambia’s 754,916 tonnes produced that year.

Source: News Diggers

Size isn’t everything

It accounts for less than 2% of annual copper production, yet Chibuluma Mine, situated on the Copperbelt, is one of Zambia’s most successful mines in safety, productivity and profitability.

Chibuluma Mine has had “only” one fatality in eight years. Its copper output per employee is 50% higher than the Zambian industry average, and its flagship Chibuluma South project was profitable barely two years after production, which is unusual for the industry. The mine has paid corporate tax every year since 2007, with a total of $112 million paid to date.

Chibuluma is a highly mechanised underground mine just outside Kalulushi, about 22 km from Kitwe. It employs 850 people, about 500 of whom are contractors. The mine produced 13 300 tonnes of copper in 2015 – a fraction of the country’s output of 711 000 tonnes.

Chibuluma was one of the first Zambian mines privatised in 1997. It is 85%-owned by the South African mining company Metorex, a wholly owned subsidiary of China’s Jinchuan Group since 2012.

What accounts for its success?

“We mine one of the highest-grade copper deposits on the Copperbelt,” says chief geologist, Narendra Shekhawat. “That means we do proportionately less work to produce the same amount of copper.”

Although the ore body is not very big, it has an average copper grade of 3%. This contrasts with large open-pit mines such as Barrick Lumwana or FQM’s new Sentinel Mine, where the grade is so low (barely 0.5%) that colossal quantities of ore have to be unearthed and treated, at considerable cost, to extract the copper. Chibuluma’ s smaller operation means not only lower costs but a simpler work set-up – problems are easier to spot and fix, approvals happen faster and turnaround times are shorter.

The mine has none of the frenetic activity characteristic of larger mines. About 600 metres underground, after carefully controlled blasting to expose the ore, a small fleet of only five articulated dump trucks drive up a long winding tunnel and bring the ore to the surface. After crushing and grinding, the ore passes through the small processing plant and emerges as copper concentrate, which is then driven to nearby Chambishi copper smelter and turned into blister copper. Very small quantities of silver are recovered as a by-product during the smelting process –about $16 000 worth a month.

Despite its enviable track record, Chibuluma has not escaped the effects of the current mining downturn. Like Zambia’s other mines, it had to shed workers in 2015, embarked on major cost-cutting and scaled back production. At the height of the copper boom in 2013, Chibuluma produced 18 000 tonnes of copper a year; that is now down to 10 000 tonnes.

“Chibuluma has one of the highest grades of copper on the Copperbelt”
“Reduced production means reduced volumes of ore through our processing plant, so we have a lot of excess capacity,” says Barry Kalumba, Head of Processing.

To maintain processing volumes, Chibuluma is scheduled to start mining a low-grade deposit of 2% at its new Chifupu project. It is also trying to persuade potential new mining ventures in the area to send their ore to Chibuluma for processing, instead of building their own processing plants.

However, the biggest challenge is that the current mineral deposit will be mined out within the next few years.

“Unless our ongoing exploration finds a new copper deposit worth exploiting soon, Chibuluma will probably close sometime between 2020 and 2022,” says Eustus Munsaka, Head of Finance. “All mines have a natural lifespan, and we are about to reach the end of ours.”

Already, a $4.4 million rehabilitation programme is under way to restore the landscape to its original state. Some 33 000 trees have been planted, carpet grass has been laid, and firebreaks have been built. Once the mine stops operating, various structures and buildings will be demolished, roads will be scraped, more land will be replanted with vegetation, and any contaminated land will be neutralised with lime. The entrance to the mine will be sealed to reduce the risk of acid mine drainage.

After closure, the shareholder Metorex and its parent company Jinchuan will shift their focus to the larger copper-mining investments in the neighbouring Democratic Republic of the Congo.

Even though closure is still a few years off, Chibuluma has developed an enviable track record in its contribution to Zambia since it was privatised in 1998. The Mine has paid taxes to government, uplifted the community through its Corporate Social Responsibility programme, and stimulated the local economy and job creation through the spending power of its employees.


Source: Mining for Zambia

Chibuluma Mines Extract from 2018 Annual Report

Revenue for the financial year ended 31st December 2017 was K671.24 million (US$70.3 million) [(2016: K541.81 million (US$52.8 million)]. Net profit over the same period was K67.12 million (US$7.03 million) [(2016: Loss of K31.09 million (US$3.03 million)]. Chibuluma Mines Plc’s (CMP) cash position reduced to K7.56 million (US$0.76 million) as at 31st December 2017 [(2016: K16.18 million (US$1.64 million)].

The Chibuluma South ore reserve continued to be depleted during the year, life of mine is now only 2 years. The development of the Chifupu ore body progressed well with Capital developments now upto 418 metre level.

On 27 June 2017, the Company incorporated a wholly owned Subsidiary company, Lufwanyama Mining Manufacturing and Trading Services Limited (LMMTS). This initiative is in response to the remaining short Life of Mine of the Company which is expected to cease operations in 2022. LMMTS commenced operations in August 2017 and during the year it did not trade with any external third parties. As part of the capacity building LMMTS were awarded mine development and support contracts at the Chifupu Mine on a competitive basis.

The company continued implementation of various cost saving and cost containment initiatives to ensure it achieved its set KPI’s and advance from a loss to a profitable position. Management continued focusing on identifying and progressing viable initiatives which would assist in extending the footprint of the Jinchuan/Metorex Group in Zambia beyond the current Life of Mine.

There were no dividends declared during the year under review (2016: Nil).

Chibuluma Mines Extract from 2017 Annual Report

Revenue for the financial year ended 31st December 2016 was K492.41 million (US$49.9 million) (unaudited)
(2015: K432.54 (US$66.5 million)). Net loss over the same period was K29.60 million (US$3.0 million) (2015: K127.49 million (US$19.6 million). Chibuluma Mines Plc’s (CMP) cash position increased to K16.83 million (US$1.64 million) as at 31st December 2016 (2015: K0.42 million (US$0.056 million).

Production continued to be negatively affected by the poor availability of mining production equipment due to frequent breakdowns of machines, a typical feature of an aged fleet, which coupled with depleting ore reserves resulted in reduced volumes and contributed to constrained cash flow at the company.

The Company has been making progress towards commissioning of the Chifupu Mine Project and was awaiting the installation of 220 Kw ventilation fans to service lower production mine levels.

The company continued implementation of various cost saving and cost containment initiatives to ensure it achieved its set Key Performance Indicators and advance from a loss to a profitable position.

Management was also focusing on identifying and progressing viable initiatives which would assist in extending the footprint of the Jinchuan/Metorex Group in Zambia beyond the current Life of Mine.

No dividends were paid for the financial year ended 31st December 2016 (2015: Nil).

Chibuluma Mines allocates $4.4m to rehab programme

CHIBULUMA Mines Plc says the company has allocated US$ 4.4 million under the rehabilitation programme aimed at restoring the landscape to its original state after the projected closure of the mines in 2022.

Although, the mines accounts for less than two percent (13, 300 tonnes of copper in 2015 out of the country’s output of 711, 000 tonnes of annual Copper production), Chibuluma Mine, is one of Zambia’s most successful mines in safety, productivity and profitability.

The company has had only one fatality in eight years, and it has paid corporate tax every year since 2007, with a total of US$ 112 million paid to date, according to the latest Mining for Zambia report.

Chibuluma Mines head of finance Eustus Munsaka said the biggest challenge is that the current mineral deposit will be mined out within the next few years.

“Unless our ongoing exploration finds a new copper deposit worth exploiting soon, Chibuluma will probably close sometime between 2020 and 2022. All mines have a natural lifespan, and we are about to reach the end of ours,” he said.

He said the company has a multi-million rehabilitation programme that is under way to restore the landscape to its original state.
“Some 33, 000 trees have been planted, carpet grass has been laid, and firebreaks have been built.

“Once the mine stops operating, various structures and buildings will be demolished, roads will be scraped, more land will be replanted with vegetation, and any contaminated land will be neutralised with lime. The entrance to the mine will be sealed to reduce the risk of acid mine drainage,” he said.

After closure, the shareholder Metorex and its parent company Jinchuan will shift their focus to the larger copper-mining investments in the neighbouring Democratic Republic of the Congo.

He said even though closure is still a few years off, Chibuluma has developed a good track record in its contribution to Zambia since it was privatised in 1998.

“The mine has paid taxes to Government, uplifted the community through its corporate social responsibility programme, and stimulated the local economy and job creation through the spending power of its employees,” Mr Munsaka said.

And Chibuluma Mine chief geologist Narendra Shekhawat said small quantities of silver are recovered as a by-product during the copper smelting process and it amounts to about US$16,000 a month.


Source: Daily Mail

Chibuluma Mines Extract from 2016 Annual Report

Net revenue for the financial year ended 31st December 2015 was K656.9 million (US$66.5 million) (2014: K691.4 (US$106.3 million)). Net loss over the same period was K312.2 million (US$31.6 million) (2014: K144.4 million (US$22.2 million profit)). Chibuluma Mines Plc’s (CMP) cash position reduced to US$0.056 million as at 31st December 2014 (2014: US$8 million). The loss was mainly due to the low copper prices and an impairment loss of US$13.4 million on property, plant and equipment.

Production was negatively affected by the poor availability of mine equipment, which, coupled with low copper prices led to constrained cash flow at the company. Consequently, CMP embarked on cost saving measures and a survival plan with emphasis on reduced and targeted mining and processing activities at the mine.

As mine reserves get exhausted CMP has been exploring the Chifupu project for the last two years to extend the life of mine and have been actively exploring new mining activities. However, due to cash flow constraints, works on the Chifupu project have reduced and CMP is evaluating the option of starting production early at the Chifupu project to recover some of the investments incurred on the project. No dividends were paid for the financial year ended 31st December 2015 (2014: US$10.8 million).

Chibuluma mines confirms 263 jobs are to go

Chibuluma Mines Plc, majority owned by Metorex of South Africa has confirmed that it is sacking off 236 workers as part of its restructuring process.

The firm says the restructuring plan is scheduled to be carried out within the first quarter of 2016.

The company says the restructuring process is inevitable as its Chibuluma South Mine is fast approaching its end of life.

This is contained in a statement released by Chibuluma Mines Plc – Board Chairman Jackson Sikamo.

‘The mining and geotechnical conditions have become more challenging with the costs of mining continuously rising. Chibuluma Mines Plc’s performance in the financial year 2015 has been characterized by low production volumes and this coupled with the continuously falling copper prices has put severe pressure on the Company’s cash-flow,’ Mr. Sikamo said.

‘The Company is in a loss making situation which, if left unaddressed may force the Company to suspend its operations permanently. Management has therefore resolved to restructure the business, in order to ensure the survival of the Company.’

Mr. Sikamo added that the restructuring places focus on reducing mining rates, substantially outsourcing mining and ore transfer activities and significantly reducing overhead expenditure.

‘Through this process, various mine operating survival options have been considered and though the available options are not economically viable, the Company through its majority shareholder Metorex (Pty) Limited has made a strategic long term decision and selected the survival option with the least losses over the life of the mine,’ he said.

Mr. Sikamo outlined the measures such as the continued development of the Chifupu Copper development project to ensure prolonged Mine life from 2018 to 2022.

He also revealed that management has decided to reduce mining output from Chibuluma South to approximately 27,000 tons per month from 45,000 tons and outsource mining and processing plant ore transfer activities as part of the restructuring plan.

Chibuluma Mines Plc was incorporated in October 1997 following the privatization of the then Zambia Consolidated Copper Mines Limited.

The Company’s copper mining operations are located in Lufwanyama district.