ARM dumps Namibian gold project

[] — Diversified South African miner African Rainbow Minerals (ARM) plans to divest from a gold project in Namibia by June and finalise development of a copper project in Zambia this year, it said on Tuesday.

African Rainbow also said it was in talks with Zimbabwe authorities on possible investments in that country and could pursue joint venture projects in Africa, buoyed by the global economic recovery, which was improving the investment climate.

African Rainbow has said the Ojikoto project in Namibia, which has a gold resource of about 1.93 million ounces, no longer falls under its investment portfolio.

The company’s Konkola North copper project in Zambia, expected to produce up to 45 000 tonnes of copper per year, a joint venture with Vale of Brazil, is currently the group’s main project outside of South Africa.

“ARM is in the process of disposing of the Ojikoto project. The disposal process is still under way and is expected to be completed in June 2010,” the company said in an email to Reuters, but gave no further details.

African Rainbow said the exact size of investment at Konkola North – where the company’s previous estimate for development was $250m – would be determined after completion of a bankable feasibility study in the second quarter of 2010.

“The construction period from go ahead decision is expected to be two and a half years.”


ARM said planned investments in Zimbabwe’s mining sector was still in early stages, with no specific projects, but it was in talks with authorities to identify opportunities that would make sense for the company and that planned indigenisation of mining firms would not deter its plans.

“Our understanding of the proposed indigenisation is that it will not only involve direct ownership into the foreign owned companies but will involve different elements of empowerment for local people,” the company said.

African Rainbow, boasting mining interests in nickel, coal, iron ore, platinum, chrome and manganese in South Africa, said global mining fundamentals, including for Platinum Group Metals (PGMs) and copper were positive, especially in the short to medium term.

It said metals demand was driven mainly by India and China and this was also supporting higher prices for most metals.

“This does create a very favourable environment for investment in mining. We continue to keep an eye out for new opportunities…” it said.

But world metals demand may not be matched with supply given the number of expansion projects that were delayed or suspended during the global economic crisis.

ARM said exploration at the Lupoto copper asset in the Democratic Republic of Congo (DRC) was still in early stages.