Baluba Mine Survival Plan

BALUBA

M I NE ’ s

SURVIVAL

PLAN

1: Preamble: During 2006, the Baluba concentrator under the leadership of Ken Seecharran as Manager and ably supported by Vincent Namushi as Plant metallurgist, and logistics provided by Johnson Chola as General Foreman, experimented with the reprocessing of discarded 14 shaft mine waste, which was crushed and dumped on the surface between the early 1950’s and the mid 1980’s. Mr Seecharran used his vast copper flotation experience on three continents to support his economic justification of a total copper recovery of 55% for the treatment process.

Figure 1: Luanshya Copper Mines as seen from Roan Township In reality, the plant achieved 65% copper recovery; this was as a result of the commitment of the plant operators to this noble cause. As Mr Seecharran was leaving Zambia to take up an appointment in the DR Congo, he cited this achievement of using surface waste to make copper in his farewell message to the metallurgical staff by saying, “We have proven that in the unlikely event of the present investors having to walk away from Luanshya, you guys will never have to endure what you went through with the unceremonious departure of Binani. My staff and I proved that copper 1

can be made at a minimal cost utilising discarded surface waste; please let that be your inspiration to persevere for the development of the country and for the well being of your families”

Figure 2: Baluba’s concentrator efficient two-stage crushing plant This report, explains in details the costing and logistical implications which were involved in such a venture. It conclusively proves that the Baluba mine should not be put on care and maintenance but continue to produce copper for the benefit of the country and the workers involved in the venture. 2: Assumptions: • •

The plant will process 5 000 tonnes of waste per day, working 24 hours per day, this equates to 14 trucks of 15 tonnes capacity per hour. Tipping of the ore will be done on the Cable Belt transfer conveyor, TB1, feed end. Tipping will be carried out North and South, thus allowing two trucks to tip simultaneously, in a safe manner.

Figure 3: Ore flowing on TB1 conveyor 2

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Loading of trucks will take place at two points on the waste dump, this well ease congestion, and facilitate the smooth flow of traffic. Since the waste was primary crushed before being tipped, there will be no need for blasting. Large rocks will be shifted aside and manual labour used to break them before loading. Since the waste is predominantly copper bearing, the chemical reagents associated with cobalt processing (lime, cyanide and dithiophosphate) will not be required, contributing to significant cost savings. Forged mill balls will be used because of its cost effectiveness. Local industries will be given preference to foreign ones. Because of logistics, and our commitment to forge a Zambian symbiosis. A person who owns a successful business will be brought in to handle the procurement function. In so doing, that person will know all the tricks involved in the supply function, and get the best bargains, in terms of quality and pricing, for the mine. Ie the classical case of the proverbial poacher becoming game ranger syndrome!!! Overtime will not be paid, everyone from GM to helper will work until the work is finished, or he/she is relieved, before going home. The Kibbutz principle from Israel!!! There will be a quarterly profit sharing bonus scheme to compensate for the sterling work called for above. It is proposed that 25% of all profit made be shared, in proportion to salary, to EVERY worker. This will act as a motivation and will deter thefts. It will also spur hard working members of the team to drive their lagging counterparts. The hospital will be maintained as a service to the workers and to the community, but as a self funding concern. The appointment of a Government Liaison manager will be made; his/her function will be regular liaison with the local and central Governments. The stakeholders must be kept informed at regular intervals!!! Communication meetings will be held on a quarterly basis at which the production activities of the mine will be review and the bonus percentage announced. Attendance will represent a cross section of the entire work force. Workers will work 12-hour shifts. This will require a three-shift rotation system, as opposed to the current four shifts system.

Figure 4: Baluba’s milling section 3

3: Calculations: • • •

5 000 tonnes per day. Feed grade 0.55% Cu, for average case scenario, 0.45% Cu for worst case scenario, and 0.40% Cu for extreme worst case scenario. Plant recovery 65% total Cu, although higher recoveries can be expected as shown below at the Frontier mine 50kms away. W ASTE

ROCK

TREATMENT

91.0

R E C O V E R Y(% )

86.0

81.0

76.0

71.0

66.0 0.14

0.24

0.34

0.44

GRADE % Cu

Figure 5: Average grade waste rock treatment at Frontier mine

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0.54

WASTE ROCK TREATMENT LOW GRADE

90.0

RECOVERY(%)

85.0

80.0

75.0

70.0

65.0

60.0 0.14

0.24

0.34 GRADE (%Cu)

Figure 6: Low grade waste rock treatment at Frontier mine • •

Smelter/refinery combined recoveries 95%. Processing cost 7¢/lb recoverable copper for average case scenario, 8¢/lb for worst case scenario and 10¢/lb for extreme worst case scenario due to increased mill balls usage. • Mining and transporting cost to plant, max 5kms, 5¢/lb recoverable copper for average case scenario, 7¢/lb for worst case scenario and 9¢/lb for extreme worst case scenario, because of the larger volume of barren rock at the lower grade to be transported. • Overheads and contingencies, 3¢/lb recoverable copper for average case scenario, 4¢/lb for worst case scenario and 5¢/lb for extreme worst case scenario. • LME selling price of copper $1.10/lb, for average case scenario $1.00/lb for worst case scenario and $0.90/lb for extreme worst case scenario.

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0.44

3.1 Average Case Scenario 1. Production, volume and cost: (5 000X0.55X0.65X0.95)/100x2 205>>>>>37 443 lbs of copper per day…….@ $1.10/lb>>>>>> $41 000 per day in revenue 2. Operating Cost: 37 443X(7+5+3)/100>>>>>> $5 616, say $5 700 in expenses 3. Profit: Daily profit is expected to be $41 000 - $5 700 = $35 300 say $35 000 Operating 350 days per year gives $12.25m, or $1m per month profit 3.2 Worst Case Scenario 1. Production, volume and cost: (5 000X0.45X0.65X0.95)/100X2 205>>>>>30 635 lbs of copper per day…….@ $1.00/lb>>>>>> $30 635 per day in revenue 2. Operating Cost: 30 635X(8+7+4)/100>>>>>> $5 820, say $5 900 in expenses 3. Profit: Daily profit is expected to be $30 635 - $5 900 = $24 735 say $24 500 Operating 350 days per year gives $8.57m, or $0.7m per month profit 3.3 Extreme Worst Case Scenario 1. Production, volume and cost: (5 000X0.40X0.65X0.95)/100X2 205>>>>>27 231 lbs of copper per day…….@$0.90/lb>>>>>>$24 508 per day in revenue 2. Operating Cost: 27 231X(10+9+5)/100>>>>>> $6 535 say $6 600 in expenses 3. Profit: Daily profit is expected to be $24 500 - $6 600 = $17 900 Operating 350 days per year gives $6.26m, or $0.5m per month profit 3.4 Extreme Worst Case Scenario, with doubled cost 1. Production, volume and cost: (5 000X0.40X.65X.95)/100X2 205>>>>>27 231 lbs of copper per day…….@$0.90/lb>>>>>>$24 508 per day in revenue 2. Operating Cost: 27 231X(20+18+10)>>>>>> $13 070 say $13 100 in expenses 3. Profit: Daily profit is expected to be $24 500 - $13 100 = $11 100 Operating 350 days per year gives $ $3.88m, or $0.3m per month profit

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4: Conclusions: • • • •

The above presentation shows conclusively that the surface waste from the defunct Luanshya mine could be reprocessed to sustain profitably at the mine as a going concern, employing about 150 people. The general manager will have a financial model on his computer, as the LME price increases; he will calculate when 18 shaft and 28 shaft waste can be trucked into the plant from Mpatamatu. While 14 shaft waste is being processed, unemployed youths will be placed on the two Mpatamatu waste dumps to hand pick copper rocks, they will be paid according to the copper content of such ore. The underground workings will be placed on care and maintenance to prevent flooding of the mine and vandalism.

Figure 7: Baluba mine, to be placed under care and maintenance • •

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The people working with the mine will be taught life skills on the running of a successful enterprise. This will be a model for the rest of the copperbelt to follow, utilising the vast tonnages mine waste discarded on surface, at every copperbelt mine. But as the connotations which go with the name, this material is often overlooked. This project will prove that with innovation, experience and ingenuity, such waste can be converted to a valuable resource to benefit the country. The surface waste which is seen as an environmental “eye sore” will be processed and the ensuing waste stored in the tailings dams in a responsible manner. The concentrate produced is deemed to be “sweet” for smelting. This is attributed to the high pyrite content which makes it exothermic (gives off heat, and saving on smelting fuel). In addition, it contributes to a low viscosity slag, thus improving smelter recovery.

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Figure 8: “Sweet” flotation concentrate, cherished by all smelters

Figure 9: Baluba’s flotation section, rebuilt using local expertise • • • • • •

This venture will act as motivation for the youths of Zambia, proving to them that external investors are not the panacea for all development!! Great emphasis will be placed on multiskilling of the workforce. Such a venture will restore the rich mining heritage on which Roan Antelope (Luanshya) was founded, and so many miners’ lives were sacrificed!!! Local suppliers will be given a dedicated part in the mine store to hold consignment stock, to be controlled by their staff. Issues will be reconciled at the end of each month, and payment promptly made 30 days later. The cost of running the mine is expected to be high initially, but as the company culture disseminates, and efficiencies are achieved, cost is expected to steadily reduce. The results of Figures 5 and 6, from the Frontier mine in Sakania, 47 kms away show that a higher recovery can be obtained if waste alone is treated, as opposed to treating a mixture of waste and virgin ore. In this case, between 15 and 22% greater production/revenue is to be expected. 8

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The amount of funding required as working capital can be met by a consortium of Zambian entrepreneurs.

Figure 10: 15-year copper price graph,………..clear patch shows the price band used in this financial model

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