[miningmx.com] – AFRICAN Rainbow Minerals (ARM) said it would have
spent $6.5bn (R50bn) in 10 years by 2014 in capital projects, and that it had
earmarked $500m to more than double production at its Zambia copperbelt project,
Konkola, with its joint venture partner, Vale.
“It’s only a thumb-suck, but I suspect we could spend R50bn in partnership with our
partners on growth projects,’ said Patrice Motsepe, Executive Chairman of ARM at the
group’s half-year results ended December, in which it posted a 24% increase in
headline earnings to R1.94bn.
“It’s a rough number but the growth is imperative.’ Some R9.9bn would be spent on
capital expenditure between 2012 and 2014. A further R8.9bn would be spent by
ARM’s partners over the same period.
Already, some 80% of capital allocated to the $400m development of Konkola North
had been spent, and production was likely from December. A further $500m could be
deployed to expand the project, however.
In an interview after the results briefing, Andre Wilkens, the outgoing CEO of ARM,
said copper production from Konkola’s Area A, which is south of current operations at
Konkola North, could see the mine produce at least 100,000 tonnes annually of copper
from the current 45,000 tonnes/year that is planned at Konkola North.
“A year from now we could make a decision and start moving,’ said Wilkens on the
possibility of sinking a 1.2km vertical shaft into Area A’s orebody, which he described
as flat and twice the grade of current operations. “We could go to 100,000
tonnes/year or slightly better,’ Wilkens added. “There is no doubt that we will mine
there. We’re extremely exicted about Area A,’ he said.
ARM was also “putting machines’ on additional exploration properties in Zambia, for
which ARM expected to be awarded exploration licences shortly.
NATIONALISATION
In a growth-focused, outward-looking introduction to ARM’s interim results, Motsepe
said that many of the political issues that had dogged the South African mining sector
over the past few years were now over. He was partly referring to calls by the ANC
Youth League for nationalisation of the mining industry – an issue that Motsepe
initially tacitly supported.
Motsepe has since distanced himself from nationalisation and said on Monday: “We’ve
always said that nationalisation is not an option.’ However, he said it had been
necessary to give nationalisation an airing because he “believed in democracy’.
“You don’t influence people by telling them to shut up,’ said Motsepe, who added
that his view on considering nationalisation at the time was because current mining
policies were not working for the majority of the people.
Commenting on current proposals by an ANC-commissioned study into state
intervention in the mining industry, which has recommended a reorganisation of the
tax regime for the industry, Motsepe expressed concern.
“What worries me about the ANC document is the tax issue. It is not good for mining.
If you have mining taxation that is excessive it will negatively affect the industry,’ he
said.
