Palabora Copper completes groundbreaking bankable feasibility study for block-cave copper and magnetite mining
Extension of life of mine project expected to inject about R9.3 billion into the economy
Chinese shareholders and the Independent Development Corporation expected to make a decision on the Lift II project to extend the life of mine for twenty years end August
A block-cave mine development project worth over R9.3 billion in the Limpopo Province, by South Africa’s major producer of refined copper, Palabora Copper (Pty) Ltd, awaits the final decision of the new shareholders end of August, 2014. The project called Lift II is expected to increase the life of mine by another twenty years, until 2033, and some R2 billion has already been spent on early works – what is now a bankable feasibility study. The mine is expected to continue to produce copper and magnetite.
The company’s General Manager for Growth Division, Nick Fouche, says; “A bankable feasibility study was completed in May 2014 and provided a sound technical and positive business case to proceed to full execution with the Lift II project. The study presented an option, at a 90% confidence level to develop a new Lift II mining footprint-450 meters below Lift I that will ensure a continuation of copper mining in Palabora until 2033.” “The cherry on top,” enthuses Fouche, “is 2 the high standard of engineering that fulfilled the required global benchmark standards for large mining projects.”
He reported that about R2 billion has already been spent to date on the development of a twin decline and supporting engineering infrastructure – known as early works. This strategy has put a significant positive outlook on the project, ensuring that the critical access to the undercut and the Lift II production level is ready for construction, at the scheduled time.
In May 2014, Palabora Copper board recommended to the shareholders that the project goes to full execution. “However, the new shareholders,” says Fouche, “having acquired the business in August 2013, wanted more information to make an informed decision and to also decide on the funding model that should be used.” He added that while the board did not provide a full approval for the entire project, certain works were allowed to continue pending the final shareholders’ decision scheduled for end of September.
Fouche says any investor would always want to have all their facts right in order to make a sound investment decision especially for a project of this magnitude so the shareholders’ request was nothing unusual. “Lift II is one of South Africa’s largest mining development projects,” he says. The project is also being developed during the time when the global Phalaborwa Mining Company, previously owned by Rio Tinto and Anglo America, was acquired by a group of companies including a Chinese consortium, which include one of China’ steel giant, Hebei Iron & Steel Group Co, Tewoo, General Nice and China Africa Development Fund as well as the Industrial Development Corporation of South Africa SOC Limited (IDC).