Matthew Hill Lusaka
CANADA-based copper producer First Quantum Minerals wants Zambia’s government to waive a 10 percent levy on nickel concentrate exports, which the firm said threatened its newest mine.
If the duty remained, the economics of the Enterprise project, located in the northwest of the country, were “borderline”, First Quantum assistant general manager Tristan Pascall said last week.
“To take nickel concentrate out of the country under the current export-levy arrangements pretty much kills this project,” he said.
Zambia, Africa’s biggest copper producer, introduced a 10 percent levy on the export of ore and concentrates in November 2011 in an effort to increase local value addition to mineral products. The government waived the levy for the export of manganese ore and concentrate in February last year.
The Enterprise operation, which will be the only nickel producer in Zambia after Albidon mothballed its Munali mine in December, would produce 38 000 tons of the stainless steel raw material annually in its first phase, the company said last month. Phase two could reach 60 000 tons a year.
There were no nickel smelters in Zambia and the scale of the mine First Quantum was building did not justify constructing one, said John Gladston, the resource optimisation manager for the Trident project, which incorporates the Sentinel and Enterprise mines.
Together with a 38 percent increase on the production rate First Quantum had planned at Sentinel, Enterprise would cost $275 million (R2.49 billion), the firm said last month.
Nickel for delivery in three months has retreated 18 percent over the past year. London Metal Exchange stockpiles rose last week to the highest levels since April 2010. – Bloomberg