INDUSTRIAL METALS / MINERALS
Great prospects for Congo phosphate mine
Cominco Resources' prospective phosphate mining operation at Hinda in the Republic of Congo, not to be confused with the DRC, has the potential to be one of the lowest cost in the world.
Posted: Tuesday , 09 Oct 2012
LONDON (Mineweb) -
For those unfamiliar with African geography there are two Congos - The Democratic Republic of Congo (DRC), and Republic of Congo - also known as Congo Brazzaville - or as the CEO of prospective Congo (Brazzaville) phosphate miner Cominco Resources puts it Bad Congo and Good Congo! However, such terminology is perhaps an over-simplification - a better definition might be Bad Congo and Not Quite So Bad Congo given that both have had their trials and tribulations in the near past including civil strife, although that in the DRC is still partly ongoing in remoter regions - and also has resulted in the deaths of several millions of people. It's in part a question of scale!
The Republic of Congo - once known as the People's Republic of Congo following its independence from France in 1960 when it was a Marxist-Leninist Communist state - is currently a somewhat uneasy democracy led by President Sassou Nguesso. Nguesso has largely dominated Congo politics since the late 1970s and the country has remained relatively stable since 2003.
One could say that both Congos are pulling themselves together, but that Congo (Brazzaville) is somewhat better placed than its neighbour. It has a more vibrant oil-based (at present) economy and appears to be bereft of some of the less savoury wheelings and dealings that have seemed prevalent in the DRC where some companies have had work and titles removed for seemingly spurious reasons in favour of other rival companies with perhaps better political connections.
And while the DRC has undoubted riches, particularly in the much sought after copper/cobalt, gold and diamonds sectors, apart from oil, the mineral riches seeing development in Congo (Brazzaville) are largely big-scale bulk commodity prospects - notably iron ore and phosphate rock. Indeed there are some very big names involved in prospective development in the iron ore sector in particular, despite these being located much further from the coast than Cominco Resources' Hinda phosphate deposit.
Junior miner Cominco Resources (Cominco is an acronym for Congo Mining Company and nothing to do with the now Teck-owned Canadian major with a similar name), is moving to develop the latter, with a mega phosphate deposit only 40-50 km from the country's principal port, Pointe Noire, which also has an international airport served by major carriers. The phosphate deposit also has the huge infrastructure positives of being crossed by a major tarred highway, an existing rail line from Pointe Noire to the capital of Brazzaville, a grid power line and also is close to an oilfield with huge waste natural gas which could be used to supply cheap power. Major phosphate deposits are in demand as the market for phosphate-based fertilisers is seen as ongoing and ever-growing as the global population expands and ever better crop yields are perceived as vital to feed the world.
Cominco Resources is thus looking at a near surface (very low strip ratio) phosphate deposit with a JORC resource of 454 million tonnes on only 25% of the initial deposit's known strike length and with plans to construct an initial 4 million tonne/year (at 32% P2O5) mining operation in its Stage 1 development and in Phase 2 to construct a phosphate fertiliser plant. Currently a scoping study led by Jacobs Engineering is under way on the project and the company is targeting a construction start in 2014 and first production a year later for a mine with a 45 year plus life. The company is also looking at the possibility of an 8 million tonne/year operation.
So far no definitive capital cost estimates are available - these will need to await the results of the scoping study - but infrastructure costs are likely to be relatively low, as will mine development costs. The main cost would be a proposed slurry pipeline from the Hinda mine to a new port facility at Pointe Indienne, just to the north of Pointe Noire, and the associated process plant and shiploading facilities which would also be located there. Cominco Resources CEO, Roderick Smith, told Mineweb, that anticipated mining costs would be among the lowest in the world.
The Congo Republic government is seen as very supportive of developing the mining sector to reduce its dependence on oil. It is reported to have been somewhat profligate with its oil revenues so is looking to a strong mining sector to help boost national income.
Cominco Resources is, so far, a privately owned company. To develop the deposit it will undoubtedly need finance and options are an IPO on a major exchange, an outright sale of the company, or a joint venture with a significant partner to help achieve this. The scoping (pre-feasibility) study results, due out at the end of the year will thus be awaited with much interest.