China Nonferrous Metal Mining Corp. (CNMC) on Saturday pledged to invest $400 million in Zambia’s Luanshya Copper Mines (LCM) after formally taking over the running of the mines, officials said.
Mines and Minerals Development Minister Maxwell Mwale said CNMC would also develop the Mulyashi project, which previous owners of LCM had said could start producing 60,000 tonnes of copper cathode by 2010.
“It is the expectation of the government that CNMC will invest no less than $400 million in re-opening Baluba mine and developing the Mulyashi project,” Mwale said during the ceremony to hand over the mine to CNMC.
Both Baluba and Mulyashi are part of LCM, a joint venture of International Mineral Resources (IMR) and Bein Stein Resources Group (BSRG), which also operated Chambishi Metals Plc, the southern African country’s largest cobalt producer.
CNMC Vice President Tao Xinghu said CNMC would reopen Baluba and develop Mulyashi as soon as possible, but he gave no timeframe.
“For Mulyashi, we need to carry out (a new) study and make a new development plan,” Tao said.
The minister said the re-opening of the Baluba mine would make it possible to reemploy some of the 1,740 miners who were laid off after the mine was placed under care and maintenance at the end of last year.
CNMC’s Xinghu said at the ceremony the company had commissioned the Chambishi smelter after a $520 million investment in the operation and its support facilities.
Tao said the smelter, with an annual capacity of 150,000 tonnes, would help Zambia increase its output, estimated to reach 600,000 tonnes in 2009.
“Our investment in Zambia and in Luanshya aims for long-term development rather than for profits in a short time,” Tao said.
Mwale also said the government had raised its own stake in Luanshya to 20 percent from 15 percent, following the pledge it made earlier this year to raise state shareholding in all the mines to 35 percent in a bid to influence decisions in the running of the mines, the country’s economic lifeblood.
(Reporting Shapi Shacinda; Editing by Agnieszka Flak and Keiron Henderson)
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