Tenke Fungurume Construction is Delayed

By Anonymous

COPPER Lundin Mining Corp. said that construction of the initial phase of operations at the Tenke Fungurume copper and cobalt project in Katanga Province in the Democratic Republic of Congo is under way. However, production startup will be behind the initial schedule of fourth quarter 2008 because of delays in construction work.

Construction and startup of production is expected to extend into 2009. To date, approximately 55 percent of design and 70 percent of procurement are complete. Bulk earthworks are substantially complete at the plant site and shop areas and concrete work has started. Approximately 15 percent of the construction work has been completed and the project is approximately 40 percent complete.

Lundin Mining holds a 24.75percent interest in the Tenke Fungurume project. Freeport-McMoRan Copper & Gold holds a 57.75- percent interest and La Generale des Carrieres et des Mines and the DRC state mining company, holds the remaining 17.5 percent interest.

Completion of the mine’s first phase will provide annual production of 115 kt (127,000 st) of copper cathode and 8 kt (8,800 st) of cobalt. Based on the current mine plan, ore grades for the first 10 years are expected to average 4.6 percent copper and 0.4 percent cobalt. The mine’s cash cost is expected to be one of the lowest in the industry.

Freeport-McMoRan said that the capital costs for developing the first phase of operations are expected to be in the range of $900 million. Part of the cost increase from the previous estimate of $650 million is due to an increased design throughput from 7 kt/d (7,700 stpd) of ore capacity to 8 kt/d (8,800 stpd) in addition to various inflationary pressures and scope changes. Capital costs estimates will continue to be reviewed. Approximately $157 million in capital costs have been incurred as of Sept. 30,2007. Freeport is responsible for funding 70 percent of project development costs and Lundin Mining the remaining 30 percent. The shareholder agreement terms with Lundin Mining state that Freeport must arrange for funding overruns in excess of 25 percent over the initial budget.

Exploration work is in progress on the Tenke Fungurume mineral concessions. The aim is to upgrade resources to reserves to support expansion plans. Year-to-date, 31,090 m (102,000 ft) have been drilled and nine rigs are active.

Copyright Society for Mining, Metallurgy, and Exploration, Inc. Dec 2007

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