Lubambe Cooper Mine BFM 81

LUBAMBE COPPER MINE

POTENTIAL IN THE COPPER BELT

Nick Bowen, CEO, Lubambe Copper Mine Project.

LUBAMBE COPPER MINE PROJECT

WE LEARN ABOUT THE VAST POTENTIAL OF THE LUBAMBE COPPER MINE AND THE ADVANTAGES OF WORKING IN ZAMBIA’S COPPERBELT.

POTENTIAL IN THE

COPPER BELT PROJECT MANAGED BY: JOHN HOLLIMAN

As the technological revolution rolls along, copper is becoming an increasingly important material. It’s essential for electronics and the growing trend towards electrification in power generation and transport. That rising demand is something the copper mining industry will have to work hard to meet.

“I

f there was an orebody like this that was easy to mine it would already have been exploited!” CEO Nick Bowen says of the Lubambe Copper Mine Project.

“Nowadays copper’s turning up either in places where nobody wants mining to occur, or where there are technical challenges to extracting it.”

While Lubambe is a project that faces challenges, local opinion is not one of them.

“Neighbouring communities in Zambia’s copper belt love & want mining,” Bowen says. “It’s not like places where mining companies are struggling to get approval.

We’re welcome to be there.”

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Lubambe is one of the newer mines in the Copperbelt. It was constructed in 2010 and came into production in 2012.

“Unlike a lot of other Copperbelt mines which have been around for 50, 60 or 70 years it’s a new operation,” Bowen says. “Until 2017 it was owned by Vale International and African Rainbow Minerals.

In 2017 the foreign partners decided to sell out and that’s when EMR Capital became the 80% shareholder, a specialised mining private equity firm that operates around the world, focusing on existing operations with potential for improvement and expansion.”

Lubambe’s an underground mining operation with a 2.5 million ton per-annum concentrator, capable producing 40,000 tons a year of copper equivalent.

“We produce a 45% grade concentrate which we then take to various local smelters to smelt into copper,” Bowen says.

DELIVERING POTENTIAL

The quality of the concentrate that can be processed at Lubambe is only one of the reasons it was such an appealing prospect for EMR Capital.

“I think probably the attractiveness of Lubambe to EMR Capital was in the fact that the mine has never delivered its full potential,” Bowen reflects.

“It has underperformed since it was constructed, for a number of operational and technical reasons. The appeal for EMR Capital was to overcome those issues and increase production.”

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LUBAMBE COPPER MINE PROJECT

The project boasts a very large mining lease of 228 square km, which includes Lubambe’s existing mine and its 70 million tons of 2% copper ore. But this is only the tip of the iceberg for EMR Capital with the mine recently completing an advanced concept study on its world-class Extension project.

“The Lubambe Extension Project focuses on a resource with 250 million tons of ore at 3.65% copper, 0.5% cobalt, and that resource is open in two directions,” Bowen says excitedly. “We’ve only explored 30% of the mining lease. So, it fits EMR’s objectives in that there is an existing mine that can be improved and potential for new development to bring a new mine online. It is the largest high-grade undeveloped copper orebody in the world.”

The project’s updated resource statement estimates it holds 9 million tonnes of copper, making it world-class.

The new ore body is situated roughly 6km south of Lubambe’s

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existing mine, at depths of over 1,000m but contained within Lubambe’s existing 228 sq. km mining license.

The new Extension is ambitious, involving the sinking of new shafts and conveyor declines, and the development of a new underground mine that will have initial production of 90,000 ton per annum of copper (in concentrate) which will then expand to 160,000 tons (in concentrate). This mine has an initial estimated lifeof-mine of 30 years with the potential for further exploration to yield many more years of life, extending the life of the Lubambe project as a whole beyond 2050.

WORLD-CLASS METHODS

But as Bowen rightly pointed out, if it was easy, everyone would do it, and this project comes with its own challenges.

Firstly, Bowen is keen to leverage the expertise he has gathered working on mining projects around the world.

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LUBAMBE COPPER MINE PROJECT

“NEIGHBOURING COMMUNITIES IN ZAMBIA’S COPPER BELT LOVE AND WANT MINING. IT’S NOT LIKE PLACES WHERE MINING COMPANIES ARE STRUGGLING TO GET APPROVAL. WE’RE WELCOME TO BE THERE.”

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LUBAMBE COPPER MINE PROJECT

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LUBAMBE COPPER MINE PROJECT

“When it comes to underground mining in Zambia generally, I’ve worked all over the world and Zambia needs to move up the productivity curve,” he admits. “It’s been a little bit isolated from what’s happening in the rest of the world. It’s not unique in that, but places like Canada and Australia have improved in underground mining. That’s what we’re bringing to Lubambe as the new shareholder, those new modern mining techniques.”

Applying these methods to Lubambe’s active mine has already yielded positive results, as Bowen proudly points out, “In the three years we’ve been involved, the number of tons mined at Lubambe has increased 60% from what it was when we took over. Per month tons have gone up. It was a challenge to mine, but we’ve been able to bring in expertise, and training to lift productivity.”

The particular technical challenges Lubambe presents are due to the depth of the mine, and the presence of water there.

“The existing mine is 500 metres deep, and it’s wet, but with the extension project the orebody doesn’t begin until 1000 metres below the surface,” Bowen explains.

“It’s not something that’s not done elsewhere in the world, it’s technically feasible. The mine’s deep, it’s not hot, but it is wet. So pumping is of real key importance.”

SAFETY FIRST

The benefits of this project are clear. As a multi-billiondollar capital investment, it will

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create approximately 3,500 jobs for Zambians throughout its life, from construction to production. Aside from the jobs created by direct employment, local businesses are set to benefit as opportunities are created for local suppliers, with Lubambe planning to source as much equipment and materials as possible from Zambia.

At the same time, Lubambe’s CSR Programmes orchestrated under the Extension project are focussing on key areas including agriculture, infrastructure, education and health. Through Corporate Tax and Mineral Royalty, Lubambe will also contribute significantly to Zambia’s economic growth.

But for Bowen, all of these benefits come secondary to the safety of the people working on his site.

“Lubambe had a good safety record when we arrived but we’ve significantly improved it, bringing in more modern and global practices but also getting people to understand we won’t accept unsafe performance,” Bowen says clearly. “We’re fatality-free since the mine started, which is unusual in Africa. We’ve also had only one lost-time accident in the last 21 months, which is unheard of in underground mining in Zambia.”

As the leader of the company, Bowen believes he has a special responsibility to ensure that safety is the number one priority of everybody who works under him.

“We’ve done a lot of work on safety, mines rescue and getting our workforce to understand we’re very serious about it,” he says. They’ve taken to that challenge and opportunity and embraced it. It’s a really safe mine and the envy of quite a few people. And it will be the same approach when we get to the Extension. I’m CEO and

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AMC CONSULTANTS

AMC successfully manages Lubambe’s complex study

“

We are very pleased with the outcomes of the Lubambe Extension FEL1 scoping study that was undertaken by a large team of client personnel and specialist industry consultants. AMC did an excellent job of managing a complex technical program and delivered the study on time and to a high standard.

AMC’s expertise in underground mining studies has been a significant factor in moving the project forward. We look forward to continuing to work with AMC as the Lubambe Extension project takes the next steps towards development.

“

- Nick Bowen, CEO and MD at Lubambe Copper Mine Limited

amcconsultants.com

SALAMANDER BUSINESS SERVICES ensuring your success

AMC SUCCESSFULLY MANAGES COMPLEX STUDY FOR LUBAMBE AMC Consultants (AMC) recently led and contributed to a comprehensive and rigorous FEL1 scoping study process to advance the potential development of the deep and challenging, high-grade copper resource at the Lubambe Extension project. The study identified potentially viable project options, outlined the programs required to further investigate the key areas of risk, and established a baseline for the further development of the project.

“Few studies in AMC’s experience have been as complex at an early stage of planning. Success required extensive planning, collaboration, excellence, solid work, and perseverance”, said Principal Mining Engineer, Leo Dawson from AMC, who managed the study on behalf of the owner. Whilst Lubambe provided a clear vision, the study team took ownership of identifying and controlling the risks and maintaining the work to a high standard. Most importantly, the team kept an understanding of the limitations of the available data at all times, providing a clear definition of further work required, and contributing to the progress of the project into feasibility stages and advanced development, if appropriate.

An established study structure, open and cloud-based communications, regular progress reporting, and group project reviews all contributed to delivering a robust technical outcome. “AMC looks forward to seeing the exciting Lubambe Extension project continue to be defined to a high standard in the feasibility study stages as the project progresses towards full development,” said Mr. Dawson. www.amcconsultants.com

SALAMANDER Nick Bowen: “One of the first challenges we had at Lubambe was to address the mine’s supply chain and spares warehousing. The level of spares we inherited was excessive and the purchasing of mechanical supplies was erratic and lacked systems. We were over stocked with slow moving and obsolete items but were out of stock of spares critical to the operation.

To address this issue, we engaged Salamander Business Services to analyse and assess the situation at Lubambe. Its Principal, John Sestan visited site and undertook a detailed assessment of the problems. John has a long history building business plans and leading transformations of assets within the mining sector. In our case John was able to work with the Lubambe team to arrive at a detailed plan to transform the on site warehousing and ordering functions. He brought experience and maturity to the team immediately post implementation when our resources were overly stretched.

• Corporate advisory and management consulting • Supply chain efficiency • Optimising working capital – cashflow management • Feasibility studies - new mines and expansions

• Interim/ temporary CFO • Acquisition, due diligence and post-acquisition business integration/ separation • Commercial negotiations • Board representation • John Sestan, principal & CEO

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Rather than just leave the plan on our desk we insisted John commenced implementation of the plan while helping build capability within Lubambe to ultimately take ownership of the project. He enthusiastically engaged with Lubambe staff and our suppliers to completely reset our processes. Within 9 months we saw a dramatic reduction of our on site spares, lowering our purchases and selling items that were obsolete to our needs. The reduction in working capital released cash which far exceeded the cost of the exercise and helped Lubambe weather the trough in copper prices we experienced late in 2019. Once the project was well established, with the help of processes and analytical tools provided by John, we reverted to our Lubambe team to complete the work.”

We would enthusiastically recommend Salamander and John to other Mining operations seeking strong support and leadership in support of major operational transformation. john@sestan.com.au

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LUBAMBE COPPER MINE PROJECT

if it’s not safe I don’t want to do it. It’s an ethos across our management team.”

The big safety challenge facing Lubambe this year, as well as mining projects and other businesses around the world, has been the COVID-19 pandemic.

“We live with it every day,” Bowen confesses. “I think we had a bit of a head start because our mines in other parts of the world were encountering COVID earlier than Africa did. It was quite late getting to Africa and I think most mines took a proactive approach to say ‘Let’s start our controls early before we have any COVID.’ We haven’t been immune to it, we’ve got 2,000 people working at the mine, it’s a big workforce. We’ve had very strong protocols in place since March including strong social distancing, strong hand hygiene, wearing of masks and everyone is checked for temperature and health as they arrive for work each day.”

So far, Lubambe has seen 80 cases of COVID-19, 79 of whom had already recovered when we spoke to Bowen.

“The majority didn’t know they had it, it was found through random testing,” Bowen says.

“We’ve had no one seriously sick from it- we’ve been very fortunate and our controls have assisted in that. So, when it comes to health and safety, we’re very comfortable but know we’ll have to live with this for quite a while.”

While the staff have been safe, COVID-19 has introduced other challenges, particularly with regards to the restrictions on travel that have been put in place.

“Some supply routes have slowed down, so we’ve had to order well in advance and with suppliers looking at carrying higher levels of stock,” Bowen says. “But there have been no interruptions of operations.”

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“LUBAMBE HAD A GOOD SAFETY RECORD WHEN WE ARRIVED BUT WE’VE SIGNIFICANTLY IMPROVED IT, BRINGING IN MORE MODERN AND GLOBAL PRACTICES BUT ALSO GETTING PEOPLE TO UNDERSTAND WE WON’T ACCEPT UNSAFE PERFORMANCE.” PATH TO PRODUCTION

Lubambe’s existing mine only has a ten-year life-of-mine ahead of it, but Bowen still believes its best days are ahead.

“We’re still on a ramp-up phase with the existing mine.

We’ve another 20-30% increase in productivity to occur and another round of improvements at the moment,” Bowen says.

“That’s about opening up additional areas, we’re being more efficient, introducing more mechanisation. That’s all happening over the next 12 months. We’re comfortable where we’re heading. The existing mine has a life of another ten years. It’ll get to producing 35,000 tons of copper a year for the next ten years. But our real focus is the Extension project.”

The next steps for the Lubambe Extension Project are clear. The pre-feasibility study needs to be complete and necessary technical and environmental approvals from

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LUBAMBE COPPER MINE PROJECT

“WE’VE HAD GREAT SUPPORT FROM CONTRACTORS, SUPPLIERS AND CONSULTANTS BOTH IN ZAMBIA AND INTERNATIONALLY.” the Government and other key stakeholders obtained. If these can be completed, it presents an opportunity to ensure the mine is approved and constructed in the shortest time possible. Talking with Bowen it’s clear he’s very excited about creating a world-class mine at a time when copper demand is increasing.

“We’ve completed what we call the advance concept study, $55 million on exploration drilling and studies. We’ve proved a viable operation, which will ultimately be processing 5 million tons a year of ore and 160,000 tons of copper equivalent,” Bowen says. “The current expected mine life is 30 years but 50+, taking into account unexplored territory.

Clearly, the next phase is to do the final feasibility studies, final design with a target to get investment approval in the second half of 2022 and start constructing in 2023. That’s our key focus- to take this from a concept to an operating mine.”

Throughout this process, from the very beginning to the days still to come, Bowen has been grateful to the country, people and businesses that have made the Lubambe project possible.

“There’s always press about Zambia and mining but some of is quite negative. From my perspective what we have here in this country is that it’s a mining country. There are a lot

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LUBAMBE COPPER MINE PROJECT

of undeveloped ore bodies and additional exploration potential, and for the companies that want to be here there’s the opportunity, develop new mines and the government is working with us to make that happen,” he says. “We’ve had great support from contractors, suppliers and consultants both in Zambia and internationally.

They’ve all helped us make the transformation from an underperforming mine to one that will soon be performing very, very well They’ve been supplying goods and services, resolving technical issues.

All our suppliers and contractors have really worked well with us and we appreciate that. The people are extremely friendly and it’s a safe country which is important for investors, and the life of these ore bodies and the grades they offer is very attractive.

There are challenges to work through but with both copper demand and copper production to fill the gap between supply and demand that’s going to make this an attractive location to invest in.”

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LUBAMBE COPPER MINE

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