Kansanshi is the largest copper mine in Africa by production and 80% is owned by First Quantum. What is the secret to its success?

In Zambia First Quantum Minerals (FQM) operates the Kansanshi mine – the largest copper mine in Africa – and smelter and the Sentinel mine in Kalumbila.

Both mines are characterised by extremely low grade ore by industry standards. For this reason margins are low and the key to mining them profitably is to maximise efficiencies.

First Quantum has been able to do this by systematically ensuring that every stage of the production process is optimised. State-of-the-art technology and cutting edge skills are used to assist with this.

How do you envisage national utilities and independent power producers (IPPs) in Africa collaborating to address power deficits on the continent?

Reliable and cost-efficient power is a vital component of FQM’s efficiency matrix.

FQM has spent US$206 million on power infrastructure, including fully financing a 602 kilometre, 330 kV power transmission power line from Mumbwa to Sentinel Mine. This power line not only provides power to Kalumbila, but also facilitates the electrification of rural North-Western Province, and improves reliability of power supplies even across the Copperbelt. In addition, the company spends U$200 million a year in ZESCO payments.

A model that improves the reliability and cost efficiency of electricity supply is to be welcomed, and the FQM is exploring ways in which national utilities and independent power producers (IPPs) can collaborate to ensure this becomes a reality.

What are the key risks and challenges faced at present and how will you overcome them?

The mining sector faces a number of potential risks at country level, most significantly concerning the reliability of electricity supply, domestic economic and policy uncertainty, as well as the international supply and demand uncertainties inherent in the sector. Exchange rate volatility and mineral royalty tax questions exacerbate those risks.

What recent updates would First Quantum like to highlight to attendees?

Despite many challenges, FQM has seen a number of milestones in the last year:

  • In February 2017 the Sentinel mine reached ‘commercial production’.
  • Work was completed by FQM’s engineering division on the Solwezi-Chingola road, on which the company has spent more than US$3.5 million to date in engineering and maintenance works to ensure its route to market is passable.
  • Local recruitment and procurement policies have been stepped up.
  • There are positive signs of approval of the Kalumbila Multi-Faculty Economic Zone.
  • FQM remains the country’s largest taxpayer, contributing US$3.3 billion to government to date.