TORONTO (miningweekly.com) - “It's a tremendously exciting event in the life of Equinox ,” the copper-miner's president and CEO Craig Williams said in Toronto on Friday, as he presented a video clip of the first concentrate entering the storage unit at the company's brand-new Lumwana mine, in Zambia.
TSX- and ASX-listed Equinox Minerals began wet commissioning of the final stage of the process plant filter press at Lumwana on Wednesday this week, with the production of an initial 66 t of copper concentrate, at a grade of about 41%.
Williams' enthusiasm was likely served with a good helping of relief, after the start-up was delayed by five months, thanks to a fire on July 7, which damaged a transformer and substation at the process plant facility.
However, Equinox accepted the plant handover from its contractors towards the end of November, and expects to be at full throughput capacity, of 20-million tons a year, by mid-2009.
Lumwana will produce an average of 172 000 t/y of copper in its first five years of operation, which means that, from 2009, Equinox will become one of the world's top-20-biggest copper-miners.
However, the ride doesn't stop there, as the company is already preparing to increase throughput to 24-million tons a year “with limited additional capital”, and will launch a feasibility study next year on a bigger expansion, which would likely take yearly throughput to 30-million tons, Williams said.
The expansion to 24-million tons will involve general optimisation and debottlenecking, and could boost output by as soon as 2010.
Lumwana also contains high-grade uranium veins which will be stockpiled for now, but could be a future source of revenue if and when the company decides to build a uranium plant.
However, Williams said that the uranium plant, as well as the potential for an onsite smelter, were not on the cards in the short to medium term.
Fort the first five years, just over one-half of the concentrate from Lumwana will be sent to the new Chambishi smelter, which is owned by two Chinese firms, China Nonferrous Metal Mining and Yunnan Copper Industry.
The balance will be treated at Glencore's Mopani smelter, which is also in Zambia.
The Chambishi smelter is currently undergoing commissioning, and expects to be ready to receive concentrates by the end of January, Williams said.
Equinox has hedged 30% of the first three years of production, or 136 255 t of copper, at an average price of $2,68/lb.
On Friday, copper for March delivery fell as low as $1,37/lb in New York, as negative data stoked concerns that the US downturn will knock demand for industrial metals.
While Williams conceded that the current environment was the “toughest in a long, long time”, he said Equinox's low-cost profile would see it through until markets rebounded.
“We are well positioned to be a survivor in this, currently, very tough market. And it's going to be tough for a while yet.”
Although costs would be higher during the ramp-up period, a steady-state operating cost of $0,80/lb “should be achievable”, he said.