Anglo American Q4 production up 7 %
Business
Global Mining conglomerate, Anglo American closed 2018 on a high note registering significant growth in production during the last quarter of year.
Anglo operates and owns significant stakes in all major mineral business interests across the world. The company’s flagship mines are in Africa, Canada being another host of key revenue generating business for the over 100 years mining giant. For the last 3 months of 2018 the Group which is listed in various stock markets including Botswana Stock Exchange reported a 7% increase in total production on a copper equivalent basis excluding the effect of the stoppage at Minas-Rio.
According to a report released by Anglo this week, the company’s diamond production basket De Beers, world’s leading diamond outfit increased its production output during the period under review by12% to rake in 9.1 million carats bringing total production for the year 2018 to 35.3 million carats. Anglo says the growth is attributable to a planned production increase at Orapa mine, although this was in the lower half of the production guidance range of 35-36 million carats.
A closer look at Debswana, De Beers‘s flagship rough diamond miner, indicates that production increased by 15% to 6.3 million carats. Production at Orapa grew by 20% to 3.6 million carats predominantly driven by planned favorable grade and higher plant utilization. At Jwaneng, the world’s richest diamond mine by value, production output went up by 9% following an increase in tonnes treated. Debswana is a leading rough diamond producer accounting for over 60 percent of De Beers total rough diamond output.
Namdeb Holdings, a 50-50 venture between De Beers and Namibian Government also registered growth in production, dispatching a 3 percent increase to close the quarter a 0.5 million carats. According to the JSE listed mining giant growth at Namdeb was driven by the Mafuta crawler vessel at Debmarine Namibia spending fewer days in port. “This was partly offset by the land operations following the transition of Elizabeth Bay to care and maintenance,” reads the report.
At the De Beers business in South Africa, rough diamond production increased by 7% to 1.2 million carats as a result of planned higher grade ore at Venetia while in Canada production increased by 5% to 1.0 million carats due to higher grades at Victor as it reaches the end of its life. Anglo says the 5 % growth registered in Canada was partially attributable to planned lower grades at Gahcho Kué.
In total volumes, rough diamond sales ended the period under review at 9.9 million carats mirroring 9.3 million carats on a consolidated basis from three sales cycles, compared to 8.2 million carats, 7.5 million carats on a consolidated basis for same number of sales cycles during the equivalent period in 2017.
Anglo American copper production increased by 23% to 183,500 tonnes, registering the highest tonnage since Q4 2013, with production increases at all operations and record copper in concentrate production at Collahuasi. Production from Los Bronces increased by 31% to 99,000 tonnes, driven by continued strong mine and plant performance and planned higher grades.
For Platinum mines, one of Anglo American’s traditional money spinning mineral interests, production increased by 3% to 602,300 ounces while palladium production increased by 3% to 386,600 ounces, due to improved operational performances across the majority of the portfolio. Own mined platinum production decreased by 12% to 307,500 ounces and palladium production decreased by 7% to 234,800 ounces due to the sale of Union mine on 1 February 2018, after which its production was purchased as concentrate.
For refined platinum, production output registered 7% growth up to 770,900 ounces, while palladium production was flat at 493,800 ounces. “Platinum sales volumes which excluding refined metal purchased from third parties increased by 8% to 776,900 ounces due to higher refined production, supplemented by a draw down in refined platinum stocks,” explains the report.
Anglo further reports that its IRON basket shrunk by 13% bringing production volumes to 10.2 million tonnes as planned to offset elevated stock levels at the mines resulting from Transnet rail constraints. “Plant yields remained slightly lower, in line with the strategy of producing higher quality products, to maximize the value of tonnes railed to port and to benefit from the strong demand for high-grade ore” explains Anglo. The Mining giant also says as a result of this decline, full year production of 43.1 million tonnes was at the lower end of the guidance range.
Under the coal segment, metallurgical coal production increased by 15% to 5.6 million tonnes, with productivity improvements at Moranbah offsetting the impact of a long wall move at Grasstree, which started in December 2018. “Grosvenor production also increased year-on-year, but was significantly lower than in Q3 2018 due to a longwall move, which was completed in late December 2018.”
Export thermal Coal production from Anglo’s South African outfits decreased marginally by 2% to 4.5 million tonnes, as operations continue to transit between mining areas. Domestic thermal coal production decreased by 54% to 3.3 million tonnes due to the completion of the sale of the Eskom-tied operations. Export thermal Coal Colombia production from Cerrejón decreased by 19% to 2.4 million tonnes as a result of high rainfall in Q4 2018.
Anglo America Chief Executive Officer Mark Cutifani said expenditure for the fourth quarter increased by 19% to $80 million compared to the same period of 2017. He further notes that exploration expenditure decreased by 6% to $29 million largely driven by adverse weather and delays with access. “Our continuing focus on efficiency and productivity improvements across the business resulted in another strong quarter, adding to our consistent track record of delivery,” he said.
Business
New Khoemacau owners commit to mine’s multibillion Pula expansion
The future of Botswana’s largest copper and silver operation, Khoemacau Copper Mining, looks promising as the new owners, MMG Group, commit to the mine’s expansion plans. MMG, an Australian headquartered company owned by China, has expressed its dedication to doubling Khoemacau’s production and transforming it into one of the most significant high-grade copper operations in Africa.
Nan Wang, the Executive General Manager for Australia and Africa at MMG, stated that while the immediate focus is on maintaining a consistent production level of 60ktpa, there are solid plans to increase Khoemacau’s production capacity. The company aims to double its production from 3.65Mtpa to 8.15Mtpa, resulting in an increase in payable copper from approximately 60ktpa to around 130ktpa.
To achieve this expansion, Khoemacau has completed a pre-feasibility study on the project and a solar power initiative. The next step is to conduct a feasibility study, which will pave the way for increased production capacity. Additionally, Khoemacau has identified extensive exploration opportunities across its license area, positioning the company for an exciting new phase of development.
The current Khoemacau operation reached full production and nameplate capacity in December 2022, following over a decade of investment totaling over P10 billion. This significant investment allowed for an intense exploration program, resulting in the development of the most automated underground mining operation in Botswana. The first concentrate was produced in June 2021, and the product entered the export market in July of the same year. Throughout 2022, the company has been working on the pre-feasibility study for the expansion project, with the feasibility study scheduled for the following year.
The expansion plans will involve the construction of a new world-class process plant in Zone 5, where the current mining of ore takes place. This new plant will be larger than the existing one in Boseto, which currently receives ore from Zone 5. The expansion will also involve the development of new underground mines, including Mango, Zone 5 North, and Zeta North East. These additional mines will bring the total number of underground shafts at Khoemacau to six. The ramp-up of production from the expansion is expected to occur in 2026.
Khoemacau, which acquired assets in the Kalahari Copper Belt after the liquidation of Discovery Metals in 2015, currently employs over 1500 people, with the majority being Batswana. The Khoemacau Mine is located in north-west Botswana, in the emerging Kalahari Copperbelt. It boasts the 10th largest African Copper Mineral Resource by total contained copper metal and is one of the largest copper sedimentary systems in the world outside of the Central African Copperbelt.
The mine utilizes underground long hole stoping as its mining method and conventional sulphide flotation for processing. Resource drilling results have shown the existing resources to have continuity at depth, and there are several exploration targets within the tenement package that have the potential to extend the mine’s life or increase productivity.
The Zone 5 mine has already ramped up production, and further expansion in the next five years will be supported by the deposits in the Zone 5 Group. The estimated mine life is a minimum of 20 years, with the potential to extend beyond 30 years by tapping into other deposits within the tenement package.
In conclusion, the commitment of MMG Group to Khoemacau’s expansion plans signifies a bright future for Botswana’s largest copper and silver operation. With the completion of pre-feasibility and feasibility studies, as well as significant investments, Khoemacau is poised to become one of Africa’s most important high-grade copper operations. The expansion project will not only increase production capacity but also create new job opportunities and contribute to the economic growth of Botswana.
Business
Khoemacau Copper Mining to be acquired by MMG Limited
Khoemacau Copper Mining, a leading copper mining company, has recently announced its acquisition by MMG Limited, a global resources company based in Australia. This acquisition marks a significant milestone for both companies and demonstrates their commitment to continued investment, growth, and sustainability in the mining industry.
MMG Limited is a renowned mining company that operates copper and other base metals projects across four continents. With its headquarters in Melbourne, Australia, MMG has a strong track record in mining and exploration. The company currently operates several successful mines, including the Dugald River zinc mine and the Rosebery polymetallic mine in Australia, the Kinsevere copper mine in the Democratic Republic of Congo, and the Las Bambas Mine in Peru. MMG’s extensive experience and expertise in mining operations make it an ideal partner for Khoemacau.
MMG’s commitment to sustainability aligns perfectly with Khoemacau’s values and priorities. Khoemacau has always placed a strong emphasis on safety, health, community, and the environment. MMG shares this commitment and applies the principles of good corporate governance as set out in the Corporate Governance Code of the Hong Kong Listing Rules. As a member of the International Council on Mining and Metals (ICMM), MMG adheres to sustainable mining principles, ensuring responsible and ethical practices in all its operations.
Over the past 12 years, Khoemacau’s current shareholders have made significant investments in the development of the company. With approximately US$1 billion deployed in the project, Khoemacau has successfully transformed from an exploration and discovery phase to a fully-fledged operating copper mine. The completion of the ramp-up of the Zone 5/Boseto operations has set the stage for the next phase of expansion.
With the acquisition by MMG, Khoemacau is poised for an exciting new chapter in its development. The completion of a pre-feasibility study on the Khoemacau expansion and a solar power project has paved the way for increased production capacity. The feasibility study will be the next step in doubling the production capacity from 3.65 million tonnes per annum (Mtpa) to 8.15 Mtpa, resulting in a significant increase in payable copper from approximately 60,000 tonnes per annum (ktpa) to 130,000 ktpa. Additionally, Khoemacau has extensive exploration opportunities across its license area, further enhancing its growth potential.
The CEO of Khoemacau, Johan Ferreira, expressed his gratitude to the current owners for their stewardship of the company and their successful transformation of Khoemacau into a fully operational copper mine. He also highlighted the company’s focus on the expansion study and its vision for the future with MMG. Ferreira emphasized that the partnership with MMG will ensure Khoemacau’s long-term success, delivering employment, community benefits, and economic development in Botswana.
MMG Chairman, Jiqing Xu, echoed Ferreira’s sentiments, stating that the acquisition of Khoemacau aligns with MMG’s growth strategy and vision. Xu emphasized MMG’s commitment to creating opportunities for all stakeholders, including shareholders, employees, and communities. He expressed confidence in Khoemacau’s expansion potential and the company’s ability to realize its full potential with the support of MMG.
The sale of Khoemacau to MMG is subject to certain conditions precedent and approvals, with the expected closing date in the first half of 2024. This acquisition represents a significant step forward for both companies and reinforces their commitment to sustainable mining practices, responsible resource development, and long-term growth in the mining industry.
In conclusion, the acquisition of Khoemacau Copper Mining by MMG Limited signifies a new era of investment, growth, and sustainability in the mining industry. With MMG’s extensive experience and commitment to responsible mining practices, Khoemacau is well-positioned for future success. The partnership between the two companies will not only drive economic development but also ensure the safety and well-being of employees, benefit local communities, and contribute to the overall growth of Botswana’s mining sector.
Business
BPC Signs PPA with Sekaname Energy
The Botswana Power Corporation (BPC) has taken a significant step towards diversifying its energy mix by signing a power purchase agreement with Sekaname Energy for the production of power from coal bed methane in Mmashoro village. This agreement marks a major milestone for the energy sector in Botswana as the country transitions from a coal-fired power generation system to a new energy mix comprising coal, gas, solar, and wind.
The CEO of BPC, David Kgoboko, explained that the Power Purchase Agreement is for a 6MW coal bed methane proof of concept project to be developed around Mmashoro village. This project aligns with BPC’s strategic initiatives to increase the proportion of low-carbon power generation sources and renewable energy in the energy mix. The use of coal bed methane for power generation is an exciting development as it provides a hybrid solution with non-dispatchable sources of generation like solar PV. Without flexible base-load generation, the deployment of non-dispatchable solar PV generation would be limited.
Kgoboko emphasized that BPC is committed to enabling the development of a gas supply industry in Botswana. Sekaname Energy, along with other players in the coal bed methane exploration business, is a key and strategic partner for BPC. The successful development of a gas supply industry will enable the realization of a secure and sustainable energy mix for the country.
The Minister of Minerals & Energy, Lefoko Moagi, expressed his support for the initiative by the private sector to develop a gas industry in Botswana. The country has abundant coal reserves, and the government fully supports the commercial extraction of coal bed methane gas for power generation. The government guarantees that BPC will purchase the generated electricity at reasonable tariffs, providing cash flow to the developers and enabling them to raise equity and debt funding for gas extraction development.
Moagi highlighted the benefits of developing a gas supply industry, including diversified primary energy sources, economic diversification, import substitution, and employment creation. He commended Sekaname Energy for undertaking a pilot project to prove the commercial viability of extracting coal bed methane for power generation. If successful, this initiative would unlock the potential of a gas production industry in Botswana.
Sekaname Energy CEO, Peter Mmusi, emphasized the multiple uses of natural gas and its potential to uplift Botswana’s economy. In addition to power generation, natural gas can be used for gas-to-liquids, compressed natural gas, and fertilizer production. Mmusi revealed that Sekaname has already invested $57 million in exploration and infrastructure throughout its resource area. The company plans to spend another $10-15 million for the initial 6MW project and aims to invest over $500 million in the future for a 90MW power plant. Sekaname’s goal is to assist BPC in becoming a net exporter of power within the region and to contribute to Botswana’s transition to cleaner energy production.
In conclusion, the power purchase agreement between BPC and Sekaname Energy for the production of power from coal bed methane in Mmashoro village is a significant step towards diversifying Botswana’s energy mix. This project aligns with BPC’s strategic initiatives to increase the proportion of low-carbon power generation sources and renewable energy. The government’s support for the development of a gas supply industry and the commercial extraction of coal bed methane will bring numerous benefits to the country, including economic diversification, import substitution, and employment creation. With the potential to become a net exporter of power and a cleaner energy producer, Botswana is poised to make significant strides in its energy sector.