By SILUMESI MALUMO

KONKOLA Copper Mine (KCM) breached section 35 (1) (b) of the Mines and Mineral Development Act of 2015 after taking over operations by producing less than the proposed output of ore per annum.

Investigations by the Daily Nation have revealed that since the Vendetta Resources took over operations in 2014, it failed to produce six million tonnes of ore per annum which was in accordance with the Act.

It has been revealed that the mining firm produced less than two million ore per annum which was contrary to the provision of the Act.

Instead of the mining firm produced 120, 409 in 2014, 115,098 in 2015, 111, 529 in 2016 and 86,584 tonnes in 2017 respectively, despite assuring government it would be producing over 500,000 tonnes per annum.

This prompted government to issue a default notice for breach of the act on April 23, 2018. Government threatened to revoke the mining license because the mining firm failed to operate in accordance with plan of mining operations.

“You have failed to develop your mining areas in Chingola and Chililabombwe and carrying on mining operations with due diligence and in compliance with the Programme of Mining Operations. This is breach of Section 35 (1) (b) of the Mines and Mineral Development Act of 2015.

“Due to your failure to carry on mining operations in line with the approved plan of mining operations, the gross proceeds of sale of minerals from your areas have been less than half of the deemed turnover applicable to your mining licences for more than three successful years. Your licences thus qualifys for revocation as provided for under Section 72 (10) (c) of the Mines and Mineral Development Act.

“Your company committed to be producing over 500,000 tonnes per annum. To the contrary you only produced 120, 409, 115,098, 111, 529 and 86,584 tonnes in 2014, 2015, 2016 and 2017, respectively,” the notice indicated.

The investigations also revealed that government was agitated with the failure by the mining firm to undertake explorations despite holding a number of exploration licences.

Government also showed concerns about for failure by KCM to utilise East and West concentrators which it had built.

What are the major issues of concern?

• Failure to develop mining areas in Chingola and Chililabombwe and carry on mining operations with due diligence and in Compliance with the Program of Mining Operations. This is in breach of Section 35(1)(b) of the Mines and Minerals Development Act of 2015.

• Due to failure to carry on mining operations in accordance with the approved plan of mining operations, the gross proceeds of sale of minerals from the KCM mining areas have been less than half of the deemed turnover applicable to the mining licences for more than three successive years. This meant that the licences thus qualified for revocation as provided for under Section 72(10(c ) of the Mines and Minerals Development Act of 2015. KCM had committed to be producing over 500,000 tons per annum. To the contrary only produced 120,409 tons, 115,098 tons, 111,529 tons and 86,584 tons in 2014, 2015, 2016 and 2017, respectively.

• Other issues raised were on the COP D and F Opens Pits that have been poorly benched resulting into disruption of normal production operations. KCM failed to provide oversight to the contractor that was engaged to conduct mining operations in the two pits. As a result, 4.4 million tonnes of one has been locked out leading to poor production.

• Konkola Deep Mining Project has tagged behind in terms of capital and secondary developments despite this being key to sustainability of operations. The company has failed to accelerate mine developments despite several interventions by government. Konkola Mine alone should have been producing six (6) million tonnes of ore per annum as opposed to the current less than two (2) million tonnes per annum being produced.

• Nchanga underground operations have remained suspended for too long a time now without any clear indication as to when operations shall resume. The ongoing technical and commercial evaluation of the Nchanga underground mine does not seem to have been any effective in-mine exploration program from the time KCM acquired the asset to replace depleted reserves.

• KCM constructed two state of the art East and West Mill Concentrators and a state of the art Smelter but all these are underutilised due to lack of feed stock. This is in addition to the much expanded but underutilized concentrator at Konkola Mine.

• KCM abandoned the implementation of the Upper Orebody Project at Nchanga mine which could have extended the life of mine by at least twenty five (25) years.

• KCM suspended the construction of the Chingola Refractory Ore processing plan and opted to treat the material through the ordinary processing plants thereby diminishing the recoveries and increasing the production costs.

• Despite KCM making commitments to accelerate dewatering of the Konkola Orebody, for over three (3) years now nothing much has been done on levels below 985 meter level rendering the Konkola Deep Mining Project lag behind by over ten (10) years now. The only dewatering being undertaken is production dewatering.

• KCM started manifesting serious signs of financial distress. The ministry was inundated with complaints from employees, suppliers and contractors about the company’s failure to honour some financial obligations.

• KCM production costs are the highest among the underground and open pit mins on the Copperbelt. Cost of production has increased three (3) times since vesting.

• There is not much happening at Konkola Deep in terms of capital and secondary developments despite this being key to sustainability of your operations. The company has been accused of failing to accelerate mine developments despite several interventions by Government. Konkola Mine should have been producing six (6) million tonnes per annum as opposed to the current two (2) million tonnes per annum.

• Nchanga underground operations have remained suspended for too long a time now without any clear indication as to when operations shall resume. The ongoing technical and commercial evaluation of the Nchanga underground mine should have been done a long time ago while the mine was still operational. There does not seem to have been any effective in-mine exploration program from the time the company acquired the asset to replace depleted reserves.

• KCM has also been accused of abandoning the implementation of the Upper Orebody Project at Nchanga mine which could have extended the life of mine by at least twenty five (25) years.

• From January, 2015 to date, the company has recorded four (4) fatal mine accidents compared to two (2) for the whole of last year.

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