Will Barrick Gold write Zambia’s new copper chapter?

One of the most intriguing chapters in the history of copper mining in Africa is currently being written on the western arm of the Lufilian Arch in north-west Zambia.

By Leon Louw for WhyAfrica?

In the shadow of towering Zambezi Teaks and unassuming Kaonde villages, two global giants have established a mining hub in north-west Zambia that is key to the world’s future energy plans.

As the race for copper, cobalt and nickel heats up and continues to fuel geopolitical tension in a new cold war, Africa, and especially the rich copper deposits in its south-central regions, is taking centre stage.

With plans afoot to develop a new railway line and associated infrastructure to transport copper products from the Democratic Republic of the Congo (DRC) and Zambia through Angola to the port of Lobito on the west coast, Barrick Gold Corporation’s (Barrick) and First Quantum Minerals’ (FQM) forays into the North-Western Province of Zambia couldn’t have been more strategic.????

Not only that, but while the world is scampering to find new copper deposits in the face of a looming supply crunch, both Barrick and FQM are upping the ante at their massive operations close to the provincial capital of Solwezi.

Prolific copper producers?

WhyAfrica visited Barrick’s Lumwana copper mine in the North-Western Province of Zambia in August during the 2023 WhyAfrica Road Trip to find out more about the mine’s expansion plans and its significance in global copper production.?? ??

The North-Western Province lies about 200km west of the Zambian Copperbelt and borders Katanga in the DRC, one of the most prolific copper producing regions in the world.

Large-scale mining west of the Copperbelt developed rapidly when FQM revived the old Kansanshi mine, close to Solwezi and about 15km from the DRC border, in 2002. Thereafter, Equinox broke ground at Lumwana in 2006, while FQM opened the Kalumbila mine in 2010.?

Global gold mining giant Barrick entered the copper mining scene in Zambia when it bought a then struggling Lumwana mine from Equinox in 2011. Barrick’s merger with Randgold Resources in 2019 breathed new life into the mine and in less than three years created one of the most efficient open cast copper mines in the world.

Compared to the deeper, high-grade “belt formation” deposits in the Copperbelt proper, the mineral deposits in the North-Western Province are relatively low grade. However, they occur closer to surface, which means both Barrick and FQM use open pit mining methods to extract copper from the ore bodies.????????

Lumwana is a typical low-grade, high-volume operation. The mine is in the process of a massive expansion drive, which will nearly double its production and transform it into one of Barrick’s Tier One assets.

Expansion, efficiency and cutting costs

According to Mark Bristow, President and CEO of Barrick, the company has identified expansion opportunities at Lumwana through an updated geological model. “The Lumwana Pre-Feasibility Study (PFS) is progressing in line with plans to transform its long-term copper profile through the delivery of an envisioned super pit, while drilling at the Kababisa prospect highlights potential mining flexibility through higher grades,” says Bristow.????

Nicholas Coomson, operations manager at Lumwana, tells WhyAfrica during our visit that there is a strong focus on optimising operational costs and improving mining efficiencies.

“Production continues to trend up as we significantly increased our mining tonnes this year after we moved the waste mining functions in-house (it was previously done by a contractor). This was done through the investment of about USD115-million in a brand-new waste mining fleet that includes 45?100-ton Komatsu trucks, 23 Komatsu Articulated Dump Trucks (ADTs) and a couple of new excavators, in addition to the ongoing investment in Ultra-Class fleet,” says Coomson.?????????????

Coomson adds that production has already benefited from the improved runtimes provided by a new fleet of trucks and shovels. “The planned upgrade of the conveyor system will secure steady ore delivery to the plant, boosting throughput and production next year,” he says. ?

Meanwhile, promising drill results at the Kamisengo satellite target have given the mining team confidence that they will be able to develop the Chimiwungo super pit and continue to improve production rates. The expansion and development of the Chimiwungo super pit (currently Barrick mines from three different pits) will increase the life of mine by more than 20 years.

The PFS is looking at ways to increase the capacity of Lumwana’s processing plant. The mine is currently treating about 27 tonnes per annum (tpa) and the PFS is looking at increasing that to more than 50 million tpa, through the construction of a twin processing plant.

Lumwana’s big turnaround

According to Bristow Lumwana’s fortunes were turned around completely in 2019. “Its life has been extended and it has been built into a profitable business, with significant growth opportunities,” says Bristow.

Today, Lumwana is one of Zambia’s largest copper producers and employs more than 4,400 people, 99.3% of them Zambian nationals.

“Lumwana’s importance to Zambia has grown. Since 2019 it has contributed more than USD2.3-billion to the country’s economy in the form of royalties, taxes, salaries, and purchases from local suppliers,” says Bristow.

The Lumwana deposits of Malundwe and Chimiwungo are hosted within the Mwombezhi Dome, a north-east trending basement dome in the western arm of the Neoproterozoic Lufilian Arc thrust-fold belt.

The Lufilian Arc is a major tectonic province characterised by broadly north-directed thrust structures and antiformal basement inliers or domes surrounded by Katangan metasediments, which host the Central African Copperbelt.

Zambia’s new copper neighbourhood

Barrick’s Lumwana mine is sandwiched between two of the other large copper mines in Africa and one of the top 10 nickel producers in the world. Its eastern neighbour is FQM’s Kansanshi copper and gold mine and to the west lies FQMs Sentinel mine, a copper producer.

FQM’s Enterprise nickel mine in the Kalumbila district (the largest nickel operation in Africa and a global top 10 producer) is only a 45-minute drive from Lumwana. Enterprise started first production of nickel concentrate in the same week that WhyAfrica visited Lumwana. Ramp-up at Enterprise continues, and commercial production and full plant throughput is expected in early 2024.

In 2022 Tristan Pascall, CEO of FQM, announced that the Canadian listed company will invest more than USD1.35-billion in new Zambian projects. FQM then approved plans to pump more than USD1.25- billion in its long-awaited expansion of Kansanshi’s operations in Solwezi (known as the ‘S3’ project) and a final USD100-million to start its USD250-million Enterprise nickel project.?

Together, the two investments represent the largest investment in Zambia since FQM’s Sentinel project was approved in 2012 and is the first step in realising the Zambian government’s vision for the mining sector, which includes increasing production to three million tonnes of copper a year within the next decade.

Kansanshi has been the lynch pin of Zambia’s copper mining industry over the last decade and a half, and was the first of the three massive, ultra-modern copper mines that have put the North-Western Province on the mining map.

The ‘S3’ project will extend the life of the mine at Kansanshi until the 2040s and increase copper and gold production by at least 25%.

Enterprise nickel mine, located approximately 14km from FQM’s Sentinel mine, will employ more than 700 full-time staff. Once fully operational, the Enterprise mine will produce some 30 000 tonnes of nickel in concentrate annually, making Zambia Africa’s pre-eminent nickel producer.

Enterprise’s high-grade nickel sulphide deposits provide the type of nickel that is required to manufacture batteries for Electric Vehicles (EVs), thus positioning Zambia as a producer of strategic metals, namely copper and nickel, that are vital to the production of new technologies and the ‘green’ energy revolution.

According to Minister of Mines and Minerals Development Paul Kabuswe, FQM’s investment will translate into tangible benefits for the Zambian people in terms of jobs and participation in the supply value chain.

Three giants sitting pretty

Despite being adjacent to the Enterprise nickel project there are no traces of nickel on Barrick’s Lumwana license.?

With copper in high demand the three giants of Zambia’s north-west is sitting pretty.? Lumwana is well on its way to produce between 260-million and 290-million pounds of copper this year. Kansanshi is set to produce more than 150?000t of copper and up to 105?000 ounces of gold, while Sentinel expects to churn out between 260?000 to 280?000t of copper in 2023. There is no doubt about the exceptional value of this piece of mining real estate in one of the most prospective geological regions of Africa.

But for how long will Barrick under Mark Bristow be content with FQM mining copper, nickel, and gold on its doorstep without taking a bite? Bristow has made no secret that Barrick, the second largest gold mining company in the world, is hunting for large copper deposits.????

According to Bristow, copper is the most strategic metal in the world. “While gold is the most precious metal, copper is the most strategic of all metals. The fundamentals for copper are solid and there are strong indications that the market will be in short supply very, very soon. All signs point to a better copper price in the future. Mining is a long-term game, and you cannot manage your business based on short term events and price fluctuations,” says Bristow.

As the copper market heads towards an imminent supply crunch, it is critical that new copper projects are brought into production as soon as possible. But the world might have been asleep at the wheel. Despite copper now being recognised as a critical and strategic mineral by various bodies across the globe, there might not be enough new projects in the pipeline to ensure sufficient supply in the short to mid-term.

To find and develop a new copper deposit could take up to ten years. Since establishing Randgold in 1995 Bristow has been a proponent of building new mines instead of mergers and acquisitions. He has followed the same philosophy when stepping into the position of CEO at Barrick in 2019 after the two companies merged.

But there was a hint that he might have changed tactics when Bloomberg reported earlier this year that FQM rejected an informal and friendly takeover offer from Barrick. Bloomberg said in the article that Barrick approached FQM in a bid to expand its copper portfolio. In fact, there were reports in 2020 that Bristow was interested in pursuing copper giant Freeport-McMoran, but all these reports, and those about FQM, has been rebuffed by Bristow as pure speculation. Nevertheless, a deal between Barrick and FQM does not only make sense logistically but could boost Barrick’s copper output significantly. So, for now all is quiet in western Zambia. However, a serious takeover bid will add more pages to the unwritten chapter about Zambia’s growing North-Western Copper Belt.??????????