Executive Summary for Wana Mining Limited in Zambia

Transcription

1 1. Introduction Executive Summary for Wana Mining Limited in Zambia Mining of Solid Minerals Several African countries have vast deposits of mineral resources that have been left largely unexploited because of a lack of technical know-how, as well as the financial incapacity to embark on capital-intensive mining projects. The country also has a wide array of mineral resources which include iron ore, coal, bauxite, gold, tin, lead and zinc which have been neglected because of the country s preoccupation with its massive Copper deposits. Zambia has unexploited high-value reserves of Emeralds, cobalt, gold, copper and other resources. Wana Emerald Mining Limited i. Wana Mining License is located in the Copperbelt Province of Zambia, between Eastings and Nothings and and and it is situated in the Kafubu Emerald Area, 30 Km from Luanshya town. The Main Pit is located on GR E N within 1: sheet 132A1. It overlies Palaeopretrozoic basement rocks and Neopretrozoic kantangan sequences which are host to Copperbelt style strata bound sediment- hosted Copper- Emerald deposits. ii. The area was surveyed using a spectrometer (Th and U channel in count per second and scintillometer (total counts per second or Cps) on a 10 m by 20 m grid iii. Registration of the Mine The Mine is registered as a Limited Company under the registrar of Companies Act (Plot No. 457 and License No.GL374). As required under the mines and minerals Act 7 of 2008, the Company has been granted Mining rights by the Ministry of Mines to start mining in Luanshya district in Copperbelt Province Zambia. All formalities have been done to start mining in full capacity. iv. Project Viability and Life Span The development proposal consists of an open pit gold-copper mine in Luanshya District of the Copperbelt with a capacity of 150 million tons of copper and 217,000 of Emerald over the 15.3 year mine life. In addition to the mine, associated tailings and waste rock areas, the proposed project would include the development of an onsite mill and supporting infrastructure, a 52- kilometre long power transmission line, an explosives magazine, and upgrade of the 35-kilometres of access road connecting the mine site. 2. Project Description

2 (a). Wana Emerald Mining Limited is a Zambian Company owned by local people. It is one of the up coming mines with limited resources to grow. It is not a big Mining company compared to other Copper Mines in the Country. Wana Emerald Mining Limited is involved in the mining of Copper and Precious Stones such as Emeralds. Competition is not expected seeing the high demand of copper and Emeralds at the world market. The mine has limited machinery and equipments hence not having the capacity to produce larger quantities and the means to process the minerals (b). The Copper oxide percentage is between percent by mass (c). The total square Km for the manganese is 320 Sq Km and room for extension of land is available (e). The location for the current Copper/ Precious mines are in Luanshya district of Copperbelt Province (d). Copper Mining has been existing for the past 100 years in Zambia up to now the demand for the mineral is high just like the precious stones. Wana Emerald Mining limited one new mine operating in the Country and there are big other mines which have been there for a number years. (e). Transportation is done by both rail and road to the Ports of Da-esalaam in Tanzania. The addition permit required for export is export permit, issued by Zambia Revenue Authority 3. Details plan of copper / Emerald Mining a). Return on investment In the first year of production the ROI is 38.08% and reaches 62.65% in the 4th year. It drops to 42.15% in the 6th year following the expenditure of equipment of US$ 600,000 in the 6th year of operation. b). Rate on return on sales the return on sales in the 3rd and 7th year after the start of the operations are as follows, Year %, Year , Year , Year , Year There is no tax in the third year because of-tax exemption due to a 5 year tax holiday. 4. Production cost a). The production costs are generally lower due to relatively high current Copper/ Emerald price and reduction in the price of sulphur Utilities b). The total labor cost is $ The details of staff requirements. c). The repair and maintenance rates used are: d). Maintenance and repair costs of mining equipment are 1% of the capital equipment. e). Maintenance and repair cost for milling equipment is 5% of the capital equipment. f). The cost of spares is calculated at 8% of the capital equipment cost. g). Depreciation is allowed on a straight line basis and residual values as follows - Buildings 5% over a 15 year period -Mining machinery and equipment 10% over a 10 year period -Vphdp<; S% with no rp<;iiillril value

3 5. PROJECT COST AND FINANCE (a) Time of evaluation: August 2013 and re-evaluation October 2014 (b) Exchange rate: 1 US$ = ZK 5 (c) Project life: the project life in financial evaluation is 15 years after the start of production. (d) Production rate: (e) The production rate of Copper/ Emerald in the first year is 50% of the designated capacity of 13,500/t Copper per annum 80% in the second year and in and after the third year 100%. Accordingly the annual throughput of Copper metal is 6. SUMMARY OF PROJECT FINANCIAL ANALYSIS 1 year of construction, 15 years of production accounting currency: thousand united states dollar Total initial investment during construction 7. SOCIO-ECONOMIC BENEFITS a. The project will create 200 permanent jobs. Although this number looks small in an economy where Employment is not readily available the provision of employment on such a small scale becomes significant especially when looked at from the point of view of an extended family support system. No doubt this project will contribute to poverty alleviation and as anew investment the project will also contribute to the general economic development of Luanshya District. b. The financial contribution to the Zambian economy cannot be overlooked as the total accumulated value that will accrue to the country will amount to US$137,832,060 at the end of the seventh year of the mine's operations. 8. Building work (a). Office building: Six prefabricated housing units with air condition facilities will be built to house the administration, laboratory, conference room warehouse stores and offices. (b) Factory building: One storey steel-framed building roofed with either corrugated iron sheets or asbestos. The factory will house the electro-wining section of the mill, storage space for the cathodes and the engineering section. (c) 100 houses shall be built to accommodate the staff $48, MACHINERY AND EQUIPMENT Types and quantities For the development of a mining complex the design and capacity of the processing plant and

4 mining equipment is of prime importance. The decision was influenced among other factors by the nature and extent of the ore deposit. In view of the small scale envisaged for the mine the following machinery and equipment has been suggested.) a). Plant Machinery and Equipment Quantity Unit Cost Total Cost - 30 ton Dump truck (4) $1,050,000 - Front End Loader with ripper (2) $ 350,000 - Bulldozer with ripper (1) $ 350,000 - Excavator (2) $ 350,000 - Drilling machine with compressor (2) $ 150,000 - Electro - winning plant (1) $ 328,500 - Trailer mill (6 modules) $1 53,500 - Water De - ionizing plant $1 72,000 - Borehole water pump (4) $ 20,000 - Water browser (2) $ 80,000-3 ton folk lift truck (1) $ 60, ton truck (1) $ 100, setter bus (1) $ 150,000-3 ton truck (1) $ 45,000-2 ton 4x4 utility vehicle (6) $ Sub Total 3,374,000 Utilities The project needs electric power and industrial water. (a) Electric power to supply the operating machinery, equipment, for lighting and for electro-winning and acid plants will be supplied from the Trailer Mill power generator that will also be connected to the ZESCO power grid. The power installed will be 1000 KVA; the power rate is US $ 0.07/KWh. The monthly power consumption was calculated using 0.6 load factor. (b) Industrial water The necessary volume of water for mining operations water for living will be obtained from mine borehole to be sunk. In addition, recycled water from the tailings dam will be included in the operations, the total water volume will be about 1950m3 liters daily and the de-ionized water rate is US $ 0.20/m3Iiters. c). CONSTRUCTION PROGRAMME Civil engineering works The major civil works will involve the construction of Open Pit, tailings pond electro-winning and acid plants

5 ITEM COST a. Open Pit $300,000 b. Tailings pond $ 80,000 c. Electro-winning plant $55,000 d. Borehole $10,000 Sub Total $ 445, In order to develop the Mine the total amount required is TOTAL AMOUNT $ 5,000, Of all profits accrued the fund shall get 45% annually 12. Summary 1. The Copper ore percentage is between 15% to 40% by mass. 2. The world demand for Copper is overwhelming of which the current mining firms are failing to meet the demand. Competition within the sector is not there due to the high demand 3. The total square Km for the Copper is 320 Sq Km and room for extension of land is available and it is located in Luanshya District of Copperbelt Province 4. The total amount of Copper is 150 Million tones,,to last for approximate 15 years 5. The location for the current Copper mines are in the Copper belt and North western Provinces 6. Copper Mining in Zambia started long way back in 1930s. Most of the Mines operating are large conglomerates and these are: Vendata Resources (Konkola Copper Mines), First Quantum ( Kansanshi Copper Mine) Barrick Gold (Lumwana Mining) NFC (Luanshya and Chambishi Mines ) Mopani Copper Mines (Mufulira & Nkana), Equinox Mines (Chibuluma Copper Miners) and few smaller mines 7. Transportation is done by both rail and road to the Ports of Da-esalaam in Tanzania. The addition permit required for export is export permit, issued by Zambia Revenue Authority 8. TOTAL AMOUNT REQUIRED $ 5,000,000