Personal copy; not for onward transmission

De Beers’ new td. pany L strategy om In what is described by its chairman, Instead, it aims to be the ‘supplier of Nicky Oppenheimer, as “one of the choice’. However, it currently sells ron & C most significant developments the dia- about two thirds of the world’s annual mond industry has seen since the supply of rough diamonds, and the Georgian House 1930s”, De Beers this week unveiled a mines that it manages contribute about oeb A 63, Coleman Street new strategy whereby it will abandon 40% of world production. Hence it L London EC2R 5BB Tel :+44 (0)20 7628-1128 its long-held role as custodian of the remains very much the dominant play- REGULATED BY THE SFA diamond market, and focus instead on er, and intends to continue to sell dia- boosting demand. Since the depression monds to selected clients through its years of the 1930s when the price of dia- regular sales or ‘sights’ held roughly monds slumped, De Beers has stock- every five weeks. piled the world’s surplus diamonds as a There will be some marked changes means of controlling supply (and though in how the sights are conducted. prices). Under the new strategy, the At present, they are characterised by stockpile is not being eliminated but it their opacity. The 125 selected will be substantially reduced – to a sightholders or diamantaires – it is esti- working level of around six months’ mated that as many as 900 diaman- supply, equivalent to some US$2.5 bil- taires are on the ‘waiting list’ – have no lion. According to Gareth Penny, the formal contract with De Beers, nor any De Beers executive mainly responsible control over the quality, quantity or the for developing the new strategy, the price of the ‘parcel’ of diamonds they working-stock level should be achieved are offered. De Beers decides what the towards the end of next year, or even market can absorb and customers are sooner. At the end of 1999, it stood at given their allocations accordingly on a US$3.9 billion. take-it-or-leave-it basis. As from July De Beers will no longer underwrite next year, legal contracts with the the market as a buyer of last resort. sightholders Continued on p.19

Establishment of the joint venture is subject to a number of conditions, of (Photograph courtesy of De Beers). Falconbridge which three are highlighted as key. First is the clarification of commercial joins in Gag arrangements with Aneka Tambang. The latter’s interest in Gag Island, a Inside The Canadian nickel producer seventh generation Contract of Work, Falconbridge Ltd is to join the Gag is currently described as 15% free-car- JOURNAL Island lateritic nickel project, in the ried and 10% loan carried, with an • Gold threat adds to eastern part of the Indonesian archipel- option to gain an additional 20% inter- Zimbabwe’s woes (p.23) London, ago, as project manager of a new joint est after 13 years of commercial opera- July 14, 2000 venture. Gag Island is currently held tion. Although publicly listed on the • Freeport’s copper shipments Volume 335 75% by Broken Hill Proprietary Co. Jakarta Stock Exchange, with a sec- No. 8591 Ltd (BHP) of Australia and 25% by ondary listing in Australia, Aneka fall (p.27) the Indonesian mining company PT Tambang is still controlled by the Aneka Tambang. Falconbridge will Indonesian Government which holds a • Analyst’s poll of forecast earn a 37.5% interest from BHP by 65% interest in the company. The gov- investing US$75 million in the project, ernment plans to dispose of a further base metal prices for 2000 with BHP retaining 37.5% and Aneka 14%, but would still retain control at and 2001 (p.30) Tambang 25%. 51%. BHP has been planning to bring in a The second condition is clarification partner experienced in the nickel busi- of the forestry classification of the land • Alcoa earnings keep rising ness, and the funds injected by on Gag Island. Commentators in (p.32) Falconbridge will be directed mainly Indonesia have expressed concern over towards completing a feasibility study, a new law which threatens to ban open- over the next two years, under the pit mining in protected forest areas 1.35% Ni and 0.08% Co. The mea- Canadian company’s management. (MJ, April 14, p.282). Thirdly, the sured and indicated portions total 12 According to BHP, the feasibility study scope of work for the proposed feasibili- Mt and 93 Mt respectively. According “may lead to development of the pro- ty study needs to be established. to Aneka Tambang, feasibility work ject”, but the company stresses that Gag Island has a total resource of carried out in 1999 envisaged potential there is no commitment to proceed 240 Mt, including both oxide and sili- production of 61,000 t/y of nickel, and Established 1835 beyond feasibility at this stage. cate zones, at an average grade of a capital cost of US$1.16 billion. ISSN 0026-5225 http://www.mining-journal.com COMMENT Editor Roger Ellis B.Sc., C.Eng. Deputy and Finance Editor Disposable assets Richard Morgan M.Sc., DIC, C.Eng. n the industrialised countries waste dis- Ok Tedi is a prime example of the range of Assistant Editor: Mineral Markets posal is a mounting problem; the millions contradictions, dilemmas and socio-political/ Andrew Thomas M.Sc., DIC Iof tonnes being generated each year by a environmental problems faced by govern- throw-away consumer society are rapidly ments, local communities and mining com- Assistant Editor: Industry in Action exhausting available landfill sites and there panies when attempting to extract minerals Dominic Mercer M.Sc., DIC, FGS is environmental opposition to creating new and metals for the greater human society sites or to the alternative, incineration. In and for the betterment of local communities Production some instances it has been deemed expedi- and national income. Commentary on these Susan Roberts ent to pay to export the rubbish to develop- issues is predominantly from non-govern- Eileen Smith ing countries where revenue from whatever mental organisations, mainly based in the Advertising source is very much to be welcomed. industrialised countries. It is instructive, Michael Bellenger For many developing nations, however, by therefore, to receive a viewpoint from the Frank Gordon far the most important source of revenues developing world and from someone with Shelley Hannan and foreign exchange is their mineral direct knowledge of the local situation (this resources. Here again, it is a convenient issue, p.19). Marketing arrangement; mines in remote parts of the Professor Bordia, head of the department Gareth Bowers world are relied upon to meet the raw mate- of mining engineering at the PNG University Carole Hoy rials needs of the affluent society of the of Technology at Lae, is forthright. He readi- Executive Director developed nations who much prefer not to ly concurs that any major development such have an unsightly mining operation on their as mining will disturb the environment but Chris Hinde Ph.D., C.Eng. doorstep. It is an imperfect solution but one argues that often it is the only source of Mining Journal, published weekly, is available only as part of a which is mutually beneficial. livelihood for the local populace. Local com- subscription with Mining Magazine and Mining Annual Review. But mining also generates waste, and munities, provincial and national govern- Annual Subscription: worldwide an estimated 3,000 Mt is pro- ments, he says, will accept such develop- £247 (US$440) duced each year from metal mining alone. ment, as long as the economic trade-offs are © Mining Journal Ltd 2000 Much of the overburden and mined waste is sufficient to compensate for environmental inert and stored safely above ground or used damage. Member of the Audit Bureau of Circulations to backfill previous mining areas (open-pit The total economic benefits and spin-offs and underground). A significant proportion, from Ok Tedi are huge by any world stan- WORLD GOLD as processed waste, is stored in tailings dards. The local town, once a hamlet of 500, Paul Burton ACSM, M.Sc., MBA Helen Payne M.Sc., DIC ponds which may or may not contain quanti- now has a population of about 10,000, and ties of heavy metals. The safe containment more than 50,000 people are estimated to MINING MAGAZINE of such waste, or lack of it in recent depend on income generated by the mine. John Chadwick B.Sc. Des Clifford B.Sc. instances, has probably generated more There is no social security net in a develop- adverse publicity for mining than any other ing country such as PNG, and Professor SUPPLEMENTS/REPORTS single issue. Bordia contends that on balance most peo- Austin Wheeler B.Eng. In Papua New Guinea, the Ok Tedi copper- ple in PNG’s Western Province (where the MINING ENVIRONMENTAL MANAGEMENT gold mine was developed controversially in mine is located) would like to see its contin- Tracey Khanna M.Sc., MCSM the mid-1980s without a tailings impound- uation. CONSTRUCTION PUBLICATIONS ment area because the steep topography at For those environmental lobbyists “who Ian Clarke B.Sc. the mine site precluded dam construction. are located far away from the real scene of Alan Kennedy B.Sc. Tailings are consigned directly into the Fly action, where their governments take Mike Smith HND (Min.) River system and the operation has been care of their livelihood”, his message is sim- RESEARCH SERVICES plagued by complaints about pollution. The ple – their efforts should be directed Iris Moncrieff majority owner, BHP, is considering selling towards forcing governments in emerging Editorial Consultant & Chairman its 53% stake or halting operations early – countries to create basic social security Michael West B.Sc., F.Eng. remaining resources are sufficient for ten support for the poor. Only when poverty is Managing Director & Publisher years – and a recent World Bank report has banished can the problems of pollution and Lawrence Williams B.Sc., C.Eng. recommended Ok Tedi’s closure on environ- environmental damage be resolved. mental grounds. The PNG Government, how- Ultimately, he argues, poverty is by far the ever, is anxious that operations continue. worst polluter. MJ LEADING INDICATORS THE MINING JOURNAL LTD Change High- 52-week Change High- 52-week 60 Worship Street on week Low Max/Min on week Low Max/Min Share Indices Jul 12 (%) (%) HSBC Indices Jul 12 (%) (%) London EC2A 2HD FT 30 3,741 0.5 38 4,103-3,521 (100 on 31/12/88 except*†) Tel: (+44 20) 7216 6060 US Dow Jones 10,784 2.9 55 11,551-9,857 Global Mining 119 3.6 26 146-109 FTSE Gold Mines 788 1.5 16 1,232-702 Global Diversified Mining 156 3.8 29 198-139 Fax: (+44 20) 7216 6050 Australian All Mining 677 2.9 46 771-597 Smaller Mining Companies 46 –0.8 20 59-43 E-mail: [email protected] South African Gold 985 –0.9 32 1,358-807 Global Base Metal Index 149 4.7 15 204-140 Toronto Met/Min 3,425 2.2 11 4,749-3,266 North American Base Metal 347 5.9 15 489-322 Subscription Dept: PO Box 10 Nikkei Dow 17,342 –0.5 27 20,833-16,044 Global Gold Index 53 0.9 8 78-51 Hang Seng 17,552 6.5 90 18,096-12,438 Global Gold Ex S Africa 60 1.7 14 85-56 Edenbridge, Kent TN8 5NE, UK North American Gold 69 1.8 17 97-63 Tel: (+44 1732) 864333 Commodity Prices Jul 12 Global Coal Mining† 141 2.5 26 188-124 Gold (London) $280.50 –2.2 38 $324-254 Other Metals/Minerals† 272 3.1 100 272-219 Fax: (+44 1732) 865747 Copper (LME) $1,790.50 1.4 68 $1,877.5-1,609 Latin American Mining* 246 0.9 61 286-182 E-mail: [email protected] Aluminium (U.S. prod.) 64.50c 0.0 44 69-61 Latin American (Ex CVRD)* 139 4.3 24 184-125 Brent Blend (dated) $30.29 0.1 93 $31.16-18.64 *100 on 31.12.89 †100 on 31/12/85 Web Home Page: www.mining-journal.com

18 Mining Journal, London, July 14, 2000 MINING WEEK

Mr Oppenheimer believes the new strate- So much for the economic benefits. On De Beers unveils gy “places De Beers and its partners in a the environmental side, the problems arise stronger position to meet the business and principally from the fact that tailings are strategy consumer challenges of the future”. disposed of directly into the Fly River Continued from p.17 De Beers sources it diamonds principally because steep topography precludes con- from its own mines in South Africa and from struction of a tailings dam. Professor will be introduced, and Mr Penny says that the mines it owns in partnerships with the Bordia outlines the options being consid- “the level of supply will be justified against governments of Botswana and Namibia. It ered to mitigate the environmental damage: evidence of marketing criteria”. A pilot sys- also purchases diamonds from Alrosa in the continuance of trial dredging in the low- tem that gives sightholders supply commit- Russia under a trade agreement which er Ok Tedi area; to dredge and move tailings ments for six months at a time is already in extends until the end of next year, and 35% by pipeline to a formed storage area; to do operation, and Mr Penny expects this to of the run-of-mine production from Ekati in neither; to close the mine early. Mine clo- “migrate in time into a much more commit- Canada. A proportion has also been pur- sure has been considered by BHP, and ted set of arrangements which will be indi- chased until recently under contract from Professor Bordia says that as the pit goes vidually tailored, reflecting market abili- SDM in Angola (a joint venture between deeper and costs rise the mine will become ties”. In order to deliver marketing state-owned Endiama, Ashton of Australia increasingly marginal as compared with improvements, Mr Penny predicts that and Odebrecht of Brazil). Negligible BHP’s other assets. Even without the envi- sightholders will have to work much more amounts of diamonds are now purchased on ronmental issues, he says, the mine is closely with retailers. the open market. becoming an economically unattractive Greater emphasis on marketing is seen as asset to manage and operate. (BHP has the key to increasing demand for diamonds already paid A$110 million in compensa- and De Beers is calling on the rest of the Ok Tedi dilemma tion in an out-of-court settlement with local industry to match its own efforts, hence the landowners in 1994, and analysts estimate preferential treatment that will be given to The environmental problems facing the Ok that early mine closure would necessitate a those diamantaires who market and distrib- Tedi copper-gold mine in Papua New write-down of A$250 million.) ute diamonds most efficiently. De Beers will Guinea have been well publicised, the eco- Since Professor Bordia prepared his spend US$170 million on international mar- nomic implications of closure for the local analysis, other options have been cited, keting this year but for the industry overall, community less so. Professor Surek Bordia, including the sale of part of BHP’s stake to the annual spend on marketing is little more Head of the Department of Mining its partners, with the balance placed in than 1% of retail sales revenue. This com- Engineering at the University of trust for local villagers affected by the mine, pares with annual expenditure of 6-10% for Technology in Lae, Papua New Guinea, has and the government has said that it has the luxury goods market as a whole. The attempted to redress this imbalance*. The received unsolicited enquiries from two luxury goods market is growing at 10% per operating company, Ok Tedi Mining Ltd resource companies interested in acquiring year and De Beers’ managing director, (OTML), is owned 53% by BHP, 17% by BHP’s stake (MJ, March 24, p.223). Gary Ralfe, says there is “a huge untapped Inmet Mining and 30% by the PNG Ok Tedi is located in the rugged Star potential” for the diamond business to Government, and produces close to 200,000 Mountains of PNG’s Western Province and match the growth rates enjoyed by leading t/y of copper in concentrates plus about Professor Bordia says that prior to its devel- luxury goods companies. He sees the brand- 400,000 oz/y of gold. In 1998, the operation opment the people in the province were liv- ing of diamonds as a catalyst for such accounted for 20% of PNG’s total exports ing in abject poverty with no access to gov- growth. and about 10% of GDP. Export sales in that ernment services because of their remote- De Beers’ London-based marketing arm, year were Kn702 million (US$1.00 = kina ness from Port Moresby. The mine, he says, Diamond Trading Co., is set to play a much 2.47) and since 1984 total export sales have has brought tremendous economic benefits more prominent role under the new strategy been well in excess of Kn6 billion. to the province, especially along the Fly and is being given a “powerful new identi- There are 81 businesses in the local area River delta. There is some opposition to ty”. Until now, the DTC has been referred employing 1,050 people, with a total mining continuing in the lower Fly River to as the company responsible for sales turnover in 1998 of Kn80.6 million, and area, and he says that most of the new eco- within the Central Selling Organisation but cumulative gross turnovers to that year of nomic and social studies should be done the perpetuation of the CSO, with its Kn625 million. OTML directly employs there to measure the extent of the damage monopolistic connotations, is no longer around 1,860 workers of whom only 163 are and the economic trade-offs against this deemed prudent. The DTC sorts and values expatriates. At the beginning of 1999, there damage. On the whole, however, Professor the rough diamonds shipped to London were 80 PNG companies servicing the mine Bordia says that the people of Western (into some 14,000 categories) and is at the with contracts valued at Kn209 million, Province would like to see the continuation interface with sightholders. and 45 overseas companies with contracts of mining operations. He believes that the To ensure continued consumer confi- worth Kn35 million. Since 1982 until the Ok Tedi dilemma mirrors real-life condi- dence, the new strategy includes the estab- end of 1998, Professor Bordia says that tions everywhere in the developing world lishment of a code of professional and ethi- some Kn429 million were paid directly to (Comment, p.18). cal standards – best practice principles – the government in taxes. *‘Metals & the Environment-Socio-Economic Dilemma and the DTC will be responsible for ensur- Total direct benefits to local communities Facing Developing Countries’ was presented during the ing that sightholders comply as a condition to the end of 1998, as calculated by the ECOW’99 workshop in Cairns. of sale. These principles are intended to PNG Chamber of Mines and Petroleum, reassure customers in the distribution amounted to Kn515 million, and included chain, as well as consumers, that the dia- royalties (Kn82.3 million), landowner com- Castromil licence monds they purchase are not, for example, pensation (Kn93 million), education and refusal confirmed so-called ‘conflict diamonds’. training (Kn22.3 million) and infrastruc- Finally, De Beers says that it is offering ture development (Kn317 million). It is Dublin-based MinMet plc announced last to sightholders an extensive package of now some 16 years since the start of produc- Friday that the Government of Portugal “world-class value-added support services, tion and it has been estimated that in excess has refused to grant the company a mining including training, marketing, business- of 50,000 people depend on income generat- licence for its Castromil gold-silver project, planning support and market research”. ed by the mine. in northern Portugal. MinMet warned last

Mining Journal, London, July 14, 2000 19 Mining Centres of the World

JOHANNESBURG

The fourth in the series of Mining Journal's special supplements on Mining Centres of the World will feature Johannesburg - the City of Gold - the centre for the huge South African mining industry. Until recently, Johannesburg has been the headquarters of (and is still the key office for) half a dozen of the world's most important mining companies, as well as a large array of associated financial, engineering and manufacturing companies. Most needs of the mining industry can be catered for within the Johannesburg metropolitan area.

Mining Journal will publish the Special Supplement on Johannesburg at the beginning of September 2000 to coincide with this year's Electra Mining Exhibition (one of the southern hemisphere's biggest mining events) being held in the city, and at which the publication will be distributed to visitors. The supplement will cover the whole spectrum of mining and mining-related companies and services located in the area. The supplement will thus follow the pattern of our previous 'Mining Centre' supplements, on London, Denver and Toronto, and will highlight major corporations and organisations. It will include maps locating key companies, details of access by public transport, accommodation etc, making it an invaluable guide for any mining executive visiting the city.

The supplement is being prepared for us by the African Mining editorial team in Johannesburg, in conjunction with our own editorial team in London. If you feel that you have relevant material to submit, please contact Paul Crankshaw in Johannesburg on (011) 622 4666 or e-mail: [email protected] or Chris Hinde in London on +44 20 7216 6060 e-mail: [email protected]

The supplement will be sent as part of the normal subscription to Mining Journal's worldwide key mining industry management readership in some 130 countries, as well as to visitors to the Electra Mining exhibition. It will also be available from our exhibit at MINEXPO 2000 in Las Vegas in mid-October.

Advertisements in the supplement are available at normal Mining Journal rates. The booking deadline is August 11th with copy required by August 18th at the latest. For details please call Mike Bellenger or Frank Gordon on +44 20 7216 6060; fax: +44 20 7216 6050 or by e-mail to [email protected] In Africa, call Bob Stephen on +27 11 952 1721 or by e-mail to [email protected] MINING WEEK month that the government had expressed Although conceding that MinMet’s Laboratory Testing environmental concerns during discussion emphasis has shifted to its South American of the details for a final mining licence for exploration projects in the past year, the Pilot Plant Testing the project (MJ, June 2, p.434), one of a company’s chief executive, Michael Nolan, number which MinMet holds in Portugal has expressed its determination to secure Consulting Services through its wholly-owned subsidiary the Castromil mining lease, via the appeal Connary Minerals. process, or to agree a compensation package MinMet notes that the government from the Portuguese Government. MinMet “appears to cite additional environmental hopes to begin talks with government offi- concerns and a delay in Connary not pro- cials in Lisbon early next week. viding expert studies on certain aspects of LakefieldResearch the Castromil mining plan by May 30”. The project lies close to residential areas. The Navan in transition INNOVATIVE THINKING FOR PRACTICAL SOLUTIONS company contends that the government’s position with regard to the apparent rea- Shares in Navan Mining plc, the successor sons for its denial of the mining licence “has company to Navan Resources plc, began no legal basis”. trading this week following the official list- The expert reports in question were being ing of the company on the London and Tel +1 705 652 2000 prepared by Knight Piésold (UK) Ltd for Dublin stock exchanges. A new UK-incor- Fax +1 705 652 6365 submission this Monday (July 10), covering porated holding company has been estab- six areas of the project’s plans: pit lining; lished, headquartered in the UK, to acquire [email protected] cyanide management; water management; the old Navan (MJ, May 26, p.419). Navan www.lakefield.com waste management; environmental man- has made considerable strides since its agement; and mine closure. MinMet notes incorporation in Ireland in 1987. It has that Connary had previously advised the grown from an explorer with activities pri- Portuguese authorities that a short delay marily in Ireland to a significant European would occur, attributed to the amount of base and precious metals producer. Ireland work required, and considers that the gov- is retained in its exploration portfolio but, ernment, in the form of the Instituto under a new management team, the main Geologico e Mineiro, has “moved with inde- focus is now on gold-copper mining and cent haste” to rescind its decision of exploration in Bulgaria, and base metals December 1999 to grant the mining lease. production and exploration in Spain. Canada • Argentina • Brazil • Chile • Peru • South Africa

People you can count on, anywhere in the world. “After 13 years here I don’t just have a lot of colleagues, I have a lot of friends.” - Ron Arlian

Technology changes constantly in our business, but people like Ron give our company a consistency that clients come to value. Solid engineering skills and a wealth of experience make Ron welcome at mining operations around the globe. Knight Piésold CONSULTING Global Expertise. Local Knowledge. www.knightpiesold.com

Mining Journal, London, July 14, 2000 21 The Geological Information System for the ANDES Geology • Deposits • Infrastructure on CDRom

GIS Andes is a homogeneous information system of the entire Andes Cordillera, covering an area of almost 4 million km2 and extending for some 8,500 km from the Guajira Peninsula in northern Venezuela to Tierra del Fuego in southern Argentina. Conceived as a tool for both the mining sector (as an aid to minerals exploration), and the academic sector (as an aid to developing new metallogenic models), GIS Andes is based on original syntheses and compilations.

The system comprises both geographical and geological layers:

A summarised geological map of the Cordillera, for large-scale analysis A detailed geological map of the Cordillera, with consistent geological representation throughout, for small-scale analysis Over 2,500 mines and mineral deposits, as well as indicator rocks associated with gold and copper mineralisation, with accompanying data, and a bibliography of references A detailed layer showing over 10,000 fault lines, with accompanying data A geographical layer which includes towns, villages, roads, railways, major airports, power supply and rivers Spot vegetation satellite images, on an 8 km grid Digital Elevation Model (DEM) Details of over 900 individual maps used in compiling the system. These maps range in scale from 1:500,000 to 1:50,000 and may be accessed for further analysis

MJ

The Mining Journal Limited L'ENTREPRISE AU SERVICE DE LA TERRE

Available from: Marketing Dept, The Mining Journal Ltd, 60 Worship Street, London EC2A 2HD, UK Tel: +44 (0)20 7216 6060 Fax: +44 (0)20 7216 6050 Email: [email protected] MINING WEEK

In southern Spain, the company has Operating costs (excluding depreciation) publication independent The achieved significant success since its acqui- totalled US$20.29/t milled (1998: sition of the Almagrera mining-milling-acid US$21.62/t) and US$19/t is targeted by plant complex from the Spanish 2001, by which time ore throughput should international the for gold community gold Government in 1997 and the development have reached 800,000 t/y, copper output of the new Aguas Tenidas underground 10,800 t/y and gold output 76,200 oz/y. mine. This mine, 21 km from Almagrera, is Proven and probable reserves at Chelopech being integrated into the processing opera- amount to some 5 Mt averaging 3.4 g/t Au tions and will complement the low-grade and 1.5% Cu. Navan also has its largest ore feed from the Sotiel mine. Aguas exploration portfolio in Bulgaria. Tenidas will not reach full production until Increased revenues as a result of the next year but output is already exceeding development at Aguas Tenidas and the revi- expectations. talisation of Chelopech enabled Navan to Last year, Almagrera produced 22,200 t of return a trading profit of US$5.8 million in zinc, 4,100 t of lead and 2,600 t of copper. 1999 after a US$2.96 million loss in 1998, This year, zinc production should reach and although the retained loss for the year 44,000 t, with a further 20% increase sched- was US$7.37 million this compared with a uled for 2001. In 1999, the 1.0 Mt/y capacity loss of US$12.46 million in 1998. The com- Sotiel mine contributed 410,000 t of ore at a pany says that arrangements with head grade of 4.77% Zn. At the 0.6 Mt/y Deutsche Bank mean that it is now fully capacity Aguas Tenidas operation, produc- financed to complete all its base capital and tion totalled 158,400 t of ore at a grade of development plans and it expects to have a 7.24% Zn but 60% of production was devel- profitable business by the end of the year, opment ore and the grade should rise accord- with a “significant improvement in 2001”. ingly as the proportion of stoping ore increas- es. Early this year, the first 23,000 t of ore run through the concentrator provided a head Zimbabwe gold mines grade of 9.1% Zn. Operating costs at the at risk Spanish mines last year (excluding deprecia- ol Gl gvs o atoiaie oeae f h atvte and activities the of coverage authoritative you gives Gold World efrac o gl mnn cmais n mres hogot the throughout markets and companies mining gold of performance world. The subscription comprises two publications: the monthly tion but including mining, milling, manage- According to Zimbabwe’s Chamber of Gold od Analyst Gold prtn ad iaca rsls f h wrds 0 ags gold largest 80 world's the of results financial and operating ment, administration and services) were Mines, the country’s gold mines are facing a producers.

US$44.17/t milled. The figure is high and critical shortage of foreign exchange and 6050 7216 (0)20 +44 Fax: 6060 Tel:7216 (0)20 +44 delivers news, analysis and comment, while the quarterly the while comment, and analysis news, delivers reflects in part the development and trial 90% are “at risk” if the situation does not mode of Aguas Tenidas, but it is considerably improve. www.worldgold.net [email protected] www.worldgold.net

lower than the 1998 figure of US$51.27/t, Zimbabwe’s 25 mines employ a workforce UK 2HD. EC2A London Street, Worship 60 For further information please contact us: contact please information further For and further improvement is anticipated. of 35,000 and last year’s production of Gold, World Department, Marketing The

Both Sotiel and Aguas Tenidas are vol- 27,666 kg accounted for 3.5% of gross the of analysis comprehensive a presents canic massive sulphide deposits and at the domestic product and earned the country latter, where proven and probable reserves 30% of its foreign exchange. amount to some 9 Mt, exploration is expect- Under Zimbabwean law, gold miners ed to increase the resource base consider- must sell their product to the central ably. A new gold resource has also been Reserve Bank. They are paid in established in the hanging wall amounting Zimbabwean dollars and the current rate of to some 950,000 t at 1.5 g/t Au, 7.49% Zn, exchange of Z$38 to one US dollar, which 0.65% Cu, 1.37% Pb and 42 g/t Ag, and has remained unchanged for the past 18 consideration is being given to installing a months, is proving too strong for the indus- CIL/CIP gold plant at the Almagrera com- try. One industry executive believes that a plex. Elsewhere in southern Spain, the com- devaluation to around Z$50 to the US dollar pany is still considering whether to proceed is required if the industry is to survive. with the Mazarron polymetallic project Another source of frustration is that gold near Cartagena. producers are not allowed to hold foreign In Bulgaria, Navan acquired a 68% stake currency accounts – such facilities are in Chelopech, Europe’s largest gold mine, in restricted to direct exporters, and gold pro- 1994. It has now increased its effective hold- ducers do not qualify because they sell their ing to 92% with the balance of ownership production directly to the Reserve Bank. World held by the government. The mine and mill Underlining the severity of the situation, World have undergone major rehabilitation, and Australia-based Delta Gold halted produc- the former practice of room-and-pillar tion last month at its Eureka mine because development is being eliminated in prepara- of the low gold price and the economic prob- tion for a switch to more efficient, multi- lems in Zimbabwe (MJ, July 7, p.10). The directional sub-level caving. This is expect- new US$24 million mine was only opened ed to reduce development tonnage from last December. This week, Falcon Gold 30% of the total mined to 14%. Last year, Zimbabwe Ltd suspended operations at its the Chelopech mine and processing facility Venice mine and warned of permanent clo- treated 612,232 t of ore (1998: 559,072 t), sure if a “meaningful devaluation of the head grades of 1.54% Cu and 4.33 g/t Au Zimbabwean dollar does not take place were achieved and production amounted to shortly”. It said that it might be forced to 59,908 oz of gold and 8,143 t of copper. Total take similar action at its Dalny and Gold silver in concentrates was 70,402 oz. Quarry mines before the end of the year.

Mining Journal, London, July 14, 2000 23 FOCUS

Your Mining Information Source oal represents some 90% of China’s primary energy reserves, and in 1998 www.infomine.com Cthe total output of 1,220 Mt accounted for 75% of national primary China’s The most accessed mining energy production. In terms of equivalent infinformation site on the internet tonnes of oil it consumed around 650 Mt compared with 530 Mt in the US and a approach Daily News world total of about 2,260 Mt. Coal supplies 76% of the fuel requirements for China’s Investor Newsletters power industry, 80% of the commercial energy for householders and 60% of the raw to coal Technology News material required for the chemicals sector. Company Database The vast majority of coal produced is con- sumed domestically, and the main cause of pollution Property Database air pollution in China is from coal combus- Supplier Database tion. The damage to municipal buildings and farm land alone, as a result of air pollu- tor, and the main priority over the next few Careers tion from coal combustion, has an annual years will be to increase the proportion of estimated economic cost of Yu16 billion steam coal being washed. Coal-washing InfoMine is a single source of (US$1.00 = Yu8.28), and this is without technology is low cost and its installation comprehensive, integrated news and considering the cost to the nation’s health. requires only modest capital investment information concerning all aspects of worldwide Because coal is likely to remain China’s compared with other clean-coal technolo- mining and mineral exploration. It is designed primary energy source for the foreseeable gies. In China, medium- and high-sulphur for both information seekers and future, the introduction of clean-coal tech- coals (sulphur content more than 2%) information providers. nology is essential, not only to reduce air account for 11% of total annual coal pro- pollution but also to make coal utilisation duction, and in about 65% of such coals the InfoMine more efficient. sulphur is contained in pyrites. Mr Zhou What can it do for you? says that most of the ash content and 50- 70% of the pyrite can be removed by InfoMine - Robertson Info-Data Inc. Tel: +1 (604) 683-2037 mechanical separation. Suite 640, 580 Hornby St. Fax: +1 (604) 681-4166 Emphasis on washing Vancouver BC, CANADA V6C 3B6 E-mail: [email protected] At the end of 1997 (the latest comprehen- Unlike the situation in the US, Australia sive data), China’s major state-owned coal and Europe where the focus is on research mines possessed 226 coal preparation plants into advanced combustion systems as a with a total washing capacity of 341 Mt/y. REPRINTS means of tackling air pollution, China has Of these, coking coal washeries numbered REPRINTS yet to reach that stage. Instead, it is direct- 140, with a washing capacity of 187 Mt/y, REPRINTS ing its efforts towards developing and and steam coal washeries numbered 86, improving methods for producing washed with a capacity of 154 Mt/y. In addition, All of the feature articles appearing coal, and the following article, contributed there were 176 local state-owned coal prepa- in Mining Journal and by Zhou Wei and Li Linqing of the China ration plants with a total design washing MINING Magazine are available as Coal Preparation Design and Research capacity of 49 Mt/y. There are also quite a reprints, at competitive rates. Institute in Pingdingshan*, outlines the number of private coal preparation plants, Representing, as they do, the current status of coal preparation in China. although these are rather small. In 1997, impartial opinion of high calibre Until recently, less than one quarter of 23% of the raw coal produced in China was independent technical writers, such China’s total raw coal production, including cleaned. Of the total volume of coal washed reprints can be a most telling both coking coal and steam coal, has been of 318 Mt, the major state-owned coal testimonial. washed. The remainder is burned or used preparation plants washed 240 Mt. without being cleaned. Coal washing, more- The average washing capacity of the over, is concentrated in the coking coal sec- state-owned plants is 1.4 Mt/y. The biggest

Companies and organisations worldwide are finding that reprints from Mining Journal/Magazine lend authority to their promotional activities — and are more effective than expensively produced brochures.

For samples and quotes, contact Des Clifford Mining Journal Ltd. 60 Worship Street, London EC2A 2HD Tel: +44 (0)20 7216 6060 Fax: +44 (0)20 7216 6050 E-mail: [email protected]

The 4 Mt/y capacity Fanggezhuang coking-coal preparation plant. 24 Mining Journal, London, July 14, 2000 FOCUS coking-coal preparation plant is proportion of raw coal being washed, partic- quality but where there is a lack of water, Fanggezhuang (Beijing), with a capacity of ularly steam coal, all saleable coal has a dry-cleaning methods are considered to 4.0 Mt/y. The biggest steam-coal prepara- higher average ash content. have considerable potential. tion plant, Antaibo in Shanxi Province, is In order to improve coal quality, China The development of processes to remove far larger, having a capacity of 15 Mt/y. A plans to build more coal preparation plants. the sulphur content from coal will be a pri- sister plant with the same capacity, By the end of this year it is expected that ority. High-sulphur coal is mainly concen- Anjialing, is under construction and com- washing capacity will reach 450-500 Mt/y, trated in the coalfields of southwest and pletion was expected at the end of 1999. and that some 350-400 Mt/y of raw coal will central China, and in the deep seams of In the typical Chinese coking-coal prepa- be washed, equivalent to around 30% of northern China. The continued develop- ration plant, there is normally a combined total coal production compared with the ment of these resources over the next process of jigging plus flotation or heavy- 23% three years ago. Mr Zhou says that, decades will necessitate an effective method media separation (HMS), with the feed par- during the ninth Five-year Plan, China will for sulphur removal. ticle size of up to 50 mm. In a typical steam- build 223 new plants with total washing For fine coal, advanced dewatering equip- coal preparation plant, there is normally an capacity of 289 Mt/y, and 100 existing ment will be developed. At present, most HMS system or a jigging circuit, with feed plants will be expanded to raise their capac- coal-preparation plants dewater their particle sizes of 25-100 mm or 13-100 mm. ity to 200 Mt/y. washed fine-coal concentrate by means of The average coal quality of the major vacuum filters, and the moisture content of state-owned coal mines in 1997 was as fol- the filter cake, normally around 30%, lows: Future plans results in the moisture of the final product being too high. Coal Ash Moisture Sulphur In the longer term there will be a number Finally, Mr Zhou says, there will also be a Content Content Content of aims. It is intended that the next genera- focus on the development of instrumenta- (%) (%) (%) tion of coal-preparation plants to be built tion and devices for automatic process con- Raw coal 25.41 – 1.02 will be larger in scale as a greater proportion trol. It is intended that ash and moisture Washed saleable coal 20.49 9.17 0.80 of raw steam coal will be washed. Plants will content, solids and liquids flow levels will be (coking and steam coal) also need to be highly efficient and use reli- measured on line (for both coal and slurry) able equipment in order to operate success- as a means of improving not only coal quali- The average ash content for all Chinese fully. To this end, new HMS systems will be ty but also financial returns. raw coal is 30% with sulphur content aver- developed and high efficiency jigs intro- aging 1.04%. Coking coal is normally duced, especially to treat ‘difficult’ coals. In *Coal Preparation Design and Research Institute, 281 West Jianshe Road, Pingdingshan, Henan Province, 467002, washed to an ash content of 9.9% and a sul- those coalfields, particularly in the north- People’s Republic of China. Tel: (+86) 375 4938284. Fax: 375 phur content of 0.67%. Because of the low west, where the coal is plentiful and of good 4938459. E-mail: [email protected]

IMMAGE ON CD

IMMAGE ON CD is now available at the special price of £58.75 per single disc (inc P&P worldwide and VAT - single user licence).

The current issue of IMMAGE ON CD contains almost 80,000 abstracts from papers on economic geology, mining and metallurgical processes published since 1979. We can also supply a copy of the full article by fast return fax or post (subject to copyright regulations). This means an ‘at home’ library for you.

IMMAGE is prepared by the Library of the Institution of Mining and Metallurgy which provides world-class services to the international mining industry.

Annual subscriptions (quarterly updates) are also available. Details from the address below.

To order, send your cheque or credit/charge card details to

IMM Information Services, 77 Hallam St, London W1N 5LR, UK. Fax (44) 0207 436 5388. Email [email protected]

Mining Journal, London, July 14, 2000 25 INDUSTRY IN ACTION

now estimated at 14.5 Mt at a grade Ltd (51%), part of France’s Cogema the object of bringing a mine into of 6.08% Zn, 0.91% Cu, 0.4% Pb, group. Attention is focused on the production early in 2002. Crew Exploration 0.45 g/t Au and 23.7 g/t Ag. The Frog’s Leg project, where 3,500 m of a reports that visible gold has been latest resource estimate has been 10,200 m reverse-circulation and identified in each of the three new audited independently by consulting diamond drilling programme has yet raises, and that the existing adit (in engineers Watts, Griffis and McOuat to be drilled. The holes are being excess of 400 m in length) is being Howards Pass option of Toronto. angled at 60o and better results to extended into the gold-bearing Copper Ridge Explorations of The increase follows the drilling of date from the RC drilling, all from structure. Vancouver has announced that it has an additional 14 holes from the separate holes, include: 28 m at 2.93 Discovered in 1993, Nalunaq is acquired an option from Placer Dome winter/spring 2000 infill and g/t Au at a depth of 50 m; 16 m at 7.56 located within 6 km of an ice-free and a US Steel subsidiary, Cygnus expansion drilling programme. The g/t Au from 108 m; 7 m at 11.85 g/t deepwater fjord, and 40 km from Mines, to purchase a 100% interest in new estimate is based on over 63,000 Au from 190 m; and 4 m at 12.17 g/t existing port facilities at Nanortalik. the Howards Pass Zn-Pb-Ag deposit m of drilling from 124 diamond drill- Au from 179 m. The more significant The Main Vein outcrops at surface along the Yukon/NWT boundary in holes and covers mineralisation from diamond drilling results include a 5 m and has been mapped over a strike northern Canada on which around surface to a depth of 1,200 m. intersection at 34 g/t Au from 40 m, distance of 2,000 m. It occurs in C$15 million has already been spent. including 152 g/t over a 1.0 m metavolcanics within the Ketilidian According to the company, the Cracow resource interval. mobile belt. Underground operations property encompasses one of the Dioro recently announced plans to involve drilling and blasting in three largest undeveloped zinc deposits in estimate raise up to A$5.96 million through a parallel adits, and simultaneously in the world, with a resource estimate The Cracow joint venture has rights issue in order to fund its raises. Ultimately, three adits, plus calculated by Placer Dome of 110.5 reported an inferred resource Mungari East project (MJ, July 7, eight to ten raises connecting the Mt at 7.7% combined zinc and lead estimate of 1.1 Mt at a grade of 11 g/t p.16). adits at 80 m intervals, will be (5.3% Zn and 2.4% Pb) at a 4% Au and 9.5 g/t Ag within the Royal completed. At present, in excess of combined cut-off, plus additional Shoot in the Klondyke epithermal Audit results 300 t/d of mineralised material is silver and cadmium. vein complex in Queensland, being treated. In addition, geologists The terms of the purchase include Australia. Thus far, no resource for Aredor’s K23 are collecting more than 50 channel an initial C$10,000 payment and a estimate has been announced for the Trivalence Mining Corp. has received samples per day and Strathcona 150-day period for due diligence. zone of mineralisation beneath the the results of an audit on its bulk Mineral Services is supervising a Copper Ridge can then exercise its old Klondyke workings. The joint sampling programme on the K23 grade-verification programme. Test option by making a C$1 million venture has applied for a mining lease kimberlite within the Aredor mining will continue until September, payment (75% cash, 25% equity over the area containing the Royal concession. The company has by which time a total of 20,000 t of units) as a part of a C$10 million total Shoot and is continuing with the extracted a 12,065 t bulk sample over material should be recovered. payment over four years. A further preparation of a prefeasibility study the past few months and an audit of A positive prefeasibility study C$5 million is payable as a bonus if a due for completion in August. the sampling programme by MPH completed in March 1999 (MJ, April decision to move to production Meanwhile, exploration continues. Consulting South Africa (Pty) Ltd 2, 1999, p.242) estimated an indicated results. The option is in the form of a Two holes located 400 m and 500 m indicates that the kimberlite has an and inferred resource of 425,000 oz at non-binding letter of intent and north of the Royal Shoot have average grade of 0.4 ct/t (based on wet a grade of 32 g/t Au at Nalunaq remains subject to approval by the recorded intersections of 4 m at 5.7 tonnes of kimberlite). Another MPH within a geological resource of 1.8 CDNX exchange and the respective g/t Au and 5.5 m at 12 g/t Au estimate assumes a moisture content Moz. Boards of Directors of Placer Dome respectively. Results are awaited for of 30%, and a 30% increase in diamond and US Steel/Cygnus Mines. holes drilled 100 m below these grade to compensate for the loss of Mindoro feasibility intersections. small stones (less than 2 mm). On this Newcrest Mining has an interest of basis the grade of the sample is 0.7 ct/t. study under way MMAJ success 70% in the joint venture and is Trivalence says that Guinea’s Meanwhile elsewhere, Crew has The Metal Mining Agency of Japan conducting the exploration Bureau National d’Expertise valued announced the commencement of a has discovered two gold deposits, programme. Sedimentary Holdings the 161.73 ct of gem-quality bankable feasibility study for its some 150 km southeast of Bamako. holds the balance of 30% in the joint diamonds recovered from the sample wholly-owned Mindoro lateritic The deposits cover an area of 0.4 km2 venture over the Cracow tenements at US$181.39/ct, and the 319.57 ct of nickel project in the Philippines. The and the MMAJ has completed 11,600 and retains a 100% interest in the industrial diamonds and boart at study will be undertaken by Kvaerner m of drilling on them, returning gold Cracow CIP plant and associated US$29.32/ct. Philippines Construction Inc., the values of up to 164.7 g/t. The infrastructure located some 2 km to As a result of the positive audit and same company which completed the discoveries were made after a three- the east of the newly estimated the subsequent sale prices of the prefeasibility study in August 1998. year exploration programme and resource. diamonds recovered by the sampling International Mining Consultants further work on the deposits will be programme, Trivalence will has been contracted to make an undertaken by a private Japanese undertake a 2,000 m diamond drilling independent assessment of the company, the Overseas Mineral NDT in Peru programme to test the K23 resource estimate, and Coffey Resources Development Co., a NDT Ventures Ltd of Vancouver has kimberlite at depth and more clearly Philippines International will carry consortium of Japanese mining and acquired two contiguous mineral define its shape and phases present. out the geotechnical evaluation of the metals companies. concessions totalling 1,600 ha in Trivalence has also reported higher minesite, overland ore-slurry pipeline The MMAJ made its discoveries central Peru. The so-called Coshuros production from Aredor (this issue, and refinery sites. URS will design during a geological survey that it is project is located 90 km east of p.28). the overland slurry pipeline and the undertaking in Mali in conjunction Trujillos and about 10 km southwest tailings disposal pipeline. with the Japan International Co- of the Tres Cruces gold-silver deposit. The Mindoro deposit is located on operation Agency and under the The area contains silicified breccias Mindoro Island, approximately 200 auspices of Japan’s official and zones of quartz-vein stockworks Development km south of Manila. Measured and development assistance programme. hosted by intermediate Tertiary indicated resources total 72.6 Mt volcanics. NDT reports gold values of (dry) with an average in situ grade of McIlvenna Bay up to 7 g/t Au in the vein material and 0.94% nickel and 0.06% cobalt, up to 1.9 g/t Au in the breccias. Nalunaq on schedule including 21.4 Mt (dry) at 1.16% resource expansion Detailed sampling is to begin shortly. Crew Development Corp. of Canada nickel and 0.06% cobalt. According Foran Mining Corp. has reported the reports that test mining is on to Crew, a significant portion of the results of a new independently Mungari East schedule at the Nalunaq gold project higher-grade resource has up to 60% audited resource estimate for its in southern Greenland where it is in low-grade bedrock material, and its McIlvenna Bay deposit located in the success joint venture with NunaMinerals removal during de-agglomeration of Flin Flon area of northern The Australian junior, Dioro A/S. Crew is earning a 67% interest in the ore should cause a considerable Saskatchewan, Canada. Total Exploration NL continues to report the project and is the operator. The increase in the head grade. Mined ore combined indicated and inferred promising results from its Mungari partners are committed to spending would be pumped 40 km by slurry resources for the Lens 2 massive East gold project in south-central C$7 million on a development pipeline to the refinery at Pili Point sulphide, the Upper West zone and Western Australia. The company has programme preparatory to on the coast. The high-pressure acid the Lens 3 massive sulphide areas a 49% interest in a joint venture with completing a final feasibility study leach process to be used will be have been increased by 26% and are Mines and Resources Australia Pty and securing project financing with designed to produce approximately

26 Mining Journal, London, July 14, 2000 INDUSTRY IN ACTION

40,000 t of nickel briquettes and 3,000 locked-cycle flotation testing have plans to commission an 80,000 oz/y Considar Metal Marketing, a joint t of cobalt briquettes annually. By- confirmed that ores from Kudz Ze (Pt) mining and concentrating venture with Hudson Bay Mining product output would include 126,000 Kayah and Wolverine can be operation at Marikana by mid-to-late and Smelting of Flin Flon, Canada, t/y fertiliser-grade ammonium combined resulting in improvements 2001. part of Anglo American plc. sulphate, representing about 30% of over results previously attained from The deal, confirming discussions the Philippines’ annual consumption. Wolverine alone. revealed last month (MJ, June 9, Based on a mill-feed ratio of 3,000 p.458), effectively allows Impala to Pirdop plant upgrade Snap Lake scoping t/d from Kudz Ze Kayah and 1,250 outsource development of three of its Union Minière’s Bulgarian t/d from Wolverine, the combined smaller project to Aquarius, whilst subsidiary, Union Minière Pirdop study operation has been assessed to be able retaining the rights to treat the Copper (UMPC), has signed an Winspear Diamonds Inc., the target to produce, on an average annual concentrates produced. Marikana agreement with Lurgi Metallurgie of of a hostile takeover bid by De Beers basis, the concentrates detailed in the was already subject to an agreement Germany for the upgrading of its (MJ, June 30, p.497), has now table below. whereby Impala would treat the Pirdop Copper plant in compliance released the results of its July 2000 Recoveries achievable to final output (MJ, June 23, p.487), and with European environmental scoping study for the Snap Lake concentrate are Zn – 91%, lead – Impala would thus hold interests in standards. The contract calls for the project. The study, prepared by 64%, Cu – 81%. Silver recovery is each of these potential sources of upgrade to be completed within 24 MRDI Canada (a division of AGRA 85% and gold 73%. smelter feed. Impala also holds a months. This is the final stage in Simons Ltd), estimates the mineable The prefeasibility study currently 17.2% shareholding in Aquarius UMPC’s ongoing investment tonnage of kimberlite at 39.5 Mt at in progress is on schedule for Platinum Ltd itself, which is listed in programme at Pirdop which will an average diluted mine grade of 1.7 completion late this year. Australia and on London’s achieve an annual production of ct/t which would yield some 67 Mct of Alternative Investment Market. 185,000 t/y of copper anode and diamonds. This is considerably higher Iranian alumina plant The immediate focus of the 45,000 t/y of LME-grade copper than the prefeasibility study estimate projects to be acquired is Everest cathodes. of 12.6 Mt at a diluted mine grade of delay South, where Impala has already The contract with Lurgi includes 1.75 ct/t and an estimated recovery of Development of a 280,000 t/y completed 57 drill-holes with 100 the supply and service of the 22 Mct. The average value for the alumina refinery in the Khorasan deflections to establish an unclassified following equipment: new steam- Snap Lake diamonds is C$171/ct Province of northeastern Iran has resource estimated at 34.7 Mt of UG2 heated dryers with dust-control (US$118). The proportion of been interrupted by questions reef, at a grade of 4.0 g/t combined system; upgrading of the existing dry mineable tonnage from that portion regarding the plant’s design. The PGM. The reef under the property electrostatic precipitators; new of the kimberlite dyke in excess of 2 m contract to establish the refinery is runs from surface to a depth of 250 m. primary and secondary hoods at the in thickness is estimated at 27.6 Mt held by Technoexport of the Czech Aquarius plans to conduct a converters; upgrading of the existing The scoping study envisages Republic, which took over the project feasibility study of Everest South wet gas-cleaning system; and mining to a depth of about 750 m with from another Czech company whilst Marikana is under upgrading and capacity increase of ore hoisted via a vertical shaft awarded the contract in the early construction, with a view to possible the sulphuric acid plants. The Lurgi starting in 2006. A two-stage 1990s. production at Everest South contract falls within Union Minière’s development is contemplated, with According to Reuters, the Iranian commencing in mid-to-late 2002. overall investment plan for an initial daily ore throughput reaching authorities have already spent around Such production would raise the additional US$109 million for 3,000 t by the end of 2003. In a second US$400 million on the project production of Aquarius Platinum environmental and plant stage, which would see the (including US$260 million in foreign (South Africa) to 300,000 oz/y of modernisation projects in Pirdop. development of a second access-shaft currency), which was originally combined PGM. The investment plan also covers a on the north shore of Snap Lake, scheduled to be commissioned last Everest North and Chieftains new tailings pond, upgrading of slag throughput would rise to 6,000 t/d. September. The Iranian side of the Plain lie 12 km due north and due flotation facilities, upgrading of Mine life is expected to be more than project is managed by Amid west of Everest South respectively. water-cooling systems and enhanced 20 years. Capital costs are estimated Engineering and Development, a These properties have not been energy efficiency. The completion of at C$289 million initially, and a private Iranian company. Discussions explored in detail, but Aquarius the programme will result in the further C$230 million for the second are reported to be under way in believes that Chieftains Plain “has decrease of gas and dust emissions phase expansion would be funded Tehran between Technoexport and the potential” to host at least 70 Mt into the environment by up to 15 from project cash flow. Overall the Iranian side regarding re- of Merensky reef and 90 Mt of UG2, times compared with the levels at the operating costs are estimated at establishing a schedule for the and that the mineralisation could be time of UM’s acquisition of the plant. C$88/t. Winspear’s chief executive, project. “significant ... especially at current Randy Turner, says that the The alumina refinery, located in metal prices”. company is excited by the results and the Jajarm area, 570 km northeast of is moving ahead to prepare a Tehran, is designed to supply Iranian Production bankable feasibility study. aluminium smelters, replacing BHP sells White Pine imported alumina. The Jajarm area is Broken Hill Proprietary Co. Ltd of rich in bauxite, and the plant lies close Australia has sold its White Pine Freeport sales below Finlayson study to a mine with reported proven copper refinery in Michigan to Expatriate Resources reports that it bauxite reserves of 19.2 Mt. Considar Inc., a wholly-owned expectations has completed the initial stage of subsidiary of the Arbed steel group, Freeport-McMoRan Copper and process metallurgy and concentrate Aquarius confirms for an undisclosed sum. The disposal Gold Inc. has said that copper sales in marketing for its Finlayson Project in follows the closure of BHP’s US the June quarter of this year stood at Canada’s Yukon. The company says Everest addition copper mines a year ago (MJ, July 2, 256 Mlb, compared with forecast sales that the results of locked-cycle Aquarius Platinum Ltd, registered in 1999, p.2), which remain on care and of 320 Mlb. The company has flotation and concentrate roasting, Bermuda, has agreed to acquire the maintenance. White Pine was not attributed the shortfall to a number and of initial discussions with Everest South, Chieftains Plain and a immediately affected by the closures of factors, including delayed interested smelters, have exceeded the portion of the Everest North because it was operating largely shipments caused by bad weather and expectations from the Wolverine platinum group metal (PGM) independently of BHP’s mines. sea conditions, and changes in the scoping study compiled earlier this properties from Impala Platinum However, BHP’s relatively new sequence of mining material and year. The project combines Holdings Ltd, in exchange for a management team has been reviewing lower ore throughput rates at its development of the recently acquired 25.5% interest in Aquarius’ wholly- the group’s worldwide asset base. Grasberg mine in Indonesia. Kudz Ze Kayah deposit and the owned subsidiary, Aquarius Platinum BHP’s director of external affairs Following a landslip into the mine’s Wolverine deposit, the latter owned (South Africa) Pty Ltd. The latter in the US, Chuck Taylor, told Reuters overburden dump, the mine has by the Wolverine joint venture (60% company owns the Marikana PGM that the sale was not material (in started on a programme to move 8 Mt Expatriate and 40% Atna project, where a feasibility study has terms of its financial impact) to the of overburden in a bid to stabilise the Resources). The results from the already been completed. Aquarius wider group. The refinery has a dump. As part of this plan, Freeport’s capacity of 68,000 t/y, but is operating subsidiary has been forced Flotation product Tonnes Zn Pb Cu Ag Au producing only “minor amounts of to reduce production at its open pit to (%) (%) (%) (g/t) (g/t) copper cathode during the transition 200,000 t/d. To compensate for this, Copper concentrate 40,300 2.5 1.8 25 4,350 16 period”, according to Mr Taylor. the mine has added 20,000 t/d of Lead concentrate 32,600 6.2 55 1.4 2,000 35 Considar plans to use White Pine to production from its underground Zinc concentrate 201,700 55 1.5 0.3 120 0.8 refine copper anodes purchased from operation which is under

Mining Journal, London, July 14, 2000 27 INDUSTRY IN ACTION development. This has enabled the with a combined weight of 133.18 ct. state coroner, who are investigating company that controls Norilsk Nickel mine to maintain mill throughput at Approximately 17% exceed 1.0 ct. the accident, have given their through its holding in Uneximbank, around 220,000 t/d compared with Toronto-based Caussa reports that it approval. Normandy does not know underpaid the Russian Government the originally budgeted 230,000 t/d. has received C$215,000 from the sale when this will be. by US$140 million when it acquired of surplus mining equipment and that the complex in the mid-1990s. the proceeds are being used to According to Reuters, the Deputy Esmeralda suits supplement working capital. Harzer to close Prosecutor General, Yuri Biriukov, The Hungarian Government said this Metaleurop is to close the zinc metal sent a letter to Vladimir Potanin, week that it plans to sue the owners of Labour contract production plant at its Harzer Zink head of Interros, saying that if the the Baia Marie gold operation in facility at Harlingerode in Germany group voluntarily repaid the US$140 Romania for US$110 million in agreed as it is unable to produce metal million, no further legal action would damages. The operation, which is Workers at Canada’s second largest competitively. The plant has an be taken. In an open response owned by the Romanian Government aluminium smelter at Becancour in annual production capacity of 20,000 published in Kommersant business and the Australian company, Quebec have overwhelmingly t/y and supplies its own zinc oxide daily, Mr Potanin demanded an open Esmeralda Exploration Ltd, was endorsed a new labour contract operation, also in Harlingerode. This investigation of the case in blamed for causing widespread according to a spokeswoman for latter operation will continue, but will accordance with Russia’s civil law. pollution in the Tisza and Danube Aluminerie de Becancour (owned now buy its zinc metal on the open rivers after a tailings dam overflowed 75% by Alcoa and 25% by Pechiney). market. Strike mandate at (MJ, March 24, p.230). The old labour contract expired at the Harzer uses a vertical retort The mine, which reopened last end of June. process which has proved unable to Sudbury month, is also to be sued by meet the desired level of profitability Over 97% of union members at Yugoslavia. According to Tanjug Power and labour and cannot comply with new Falconbridge’s Sudbury nickel Belgrade, the country’s public environmental legislation without operations have voted in favour of attorney, Milos Bojovic, has problems hit Zincor heavy new investment. Metaleurop giving their representatives a strike submitted a claim for US$2 million in Power outages and labour problems says the plant made a 3 million mandate. Tom Dattilo, a spokesman damages as compensation for the within its 680-strong workforce are negative contribution to its results for the Canadian Auto Workers Union impact of the spill on the Danube in expected to cause Zinc Corp. of South last year. which represents the workers, said Yugoslav territory. Africa Ltd’s output to fall to its lowest that over a four-day period, 85% of level in four years, according to a Aredor production the unionised work force voted. As a Codemin maintains company spokesman. Zincor result of the mandate, if no agreement estimates production of 103,000 t of and sales rise between the union and Falconbridge output . . . zinc metal this financial year (ended Trivalence Mining Corp. reports that is reached by August 1, the workers Mineraçao Codemin, the Brazilian June 30), as against 110,000 t last its 85%-owned Aredor operation in will go on strike. nickel producer owned 90% by Anglo year. However, the company forecasts Guinea (MJ Guinea Supplement, Mr Dattilo said that union and American plc, should produce around production increasing to 113,000 t March 2000, p.9) achieved a 63% management representatives are 7,000 t of nickel contained in ferro- during the new financial year, and increase in diamond output during the meeting on a daily basis to discuss a nickel this year according to Ruy intends to raise output to 125,000 t by financial year to June 30. Production number of issues regarding a new Fischer, a director of the company. 2004. Zincor is now controlled by reached 40,802 ct and sales revenues labour contract, including This is at a similar level to 1999 Iscor which acquired a 65% stake rose by 88% to US$15.27 million. The contracting out work, wages, pensions output. According to Mr Fischer, earlier this year from Gold Fields of company attributes the increase to and job security. He said that the Codemin plans to maintain current South Africa. improvements in the diamond CAW had no plans to accept a similar production levels while investing in recovery process at the mine and agreement to that agreed by Inco and other projects such as the Barro Alto plant. March quarter net income has the United Steelworkers of America nickel deposit in Goias State, Brazil, Jinchuan fire been restated at $1.03 million union at its Sudbury operations, and the Loma de Niquel mine in China’s largest nickel producer, compared with a loss of $855,717 for adding that he “wasn’t too impressed Venezuela. At Barro Alto, contained Jinchuan Nonferrous Metal Co. the same period in 1999. Trivalence with the Inco agreement.” nickel reserves are estimated at (JNMC), has reported that a fire at a also reports that at its most recent Three years ago, when the previous 72,000 t and feasibility studies are in nickel mine in Jinchang city in Gansu diamond sale held in Conakry on June labour contract expired, union progress. At Loma de Niquel, Province, northwest China, has killed 27 it sold 4,276.3 ct for $2.62 million, members went on a 26-day strike production this year is forecast at 17 people. The fire broke out in a including $1.32 million for a 25.73 ct before the current contract was 18,000 t. The company currently has transport tunnel and the miners were pink diamond. agreed upon. no plans to reopen the Morro de suffocated. The cause of the fire is Trivalance has also reported on Niquel operation shut down in 1998. being investigated. bulk sampling work (this issue, p.26). High power-costs The fire has been put out and . . . SLN increase operations are described as nearly bite again back to normal. Last year JNMC Mexican silver lift The high power-costs caused by anticipated produced 40,000 t of nickel and April silver production in Mexico, the electricity shortages in the western According to Yves Rambaud, expects to exceed this tonnage in world’s top producer, was 234,647 kg, US (MJ, June 30, p. 499) have chairman and chief executive of 2000. Annual maintenance is up by 5% on April 1999, according to claimed another victim, the parent company Eramet, Société Le scheduled to begin shortly but this the country’s national statistics Continental copper and molybdenum Nickel’s nickel production should will be in rotation, one furnace at a institute INEGI. Overall Mexican mine in Butte, Montana. The mine is reach 62,000 t in 2001, up from an time, so as not to affect overall mining output in April was 4.5% up a joint venture between Montana anticipated 57,000 t this year (a output. on a year ago in real terms. In the 12 Resources (50.1%) and Asarco Inc., a reduction from the initial target months to April, silver production unit of Grupo Mexico, and produces owing to labour problems in February Bronzewing resumes totalled 832,958 kg – 8.4% more than around 40,000 t/y of copper and 10 and March). Next year, depending on in the same period in 1999. Gold Mlb/y of molybdenum. Montana the results of an ongoing feasibility milling production rose 8.5% in April, but Resources said that the closure is study, SLN is due to make a decision Milling has resumed at the was still down 11.6% year-on-year. temporary and that the mine will on whether to increase its New Bronzewing mine in Western Copper output was 21% higher, zinc reopen when its management can Caledonian nickel production to Australia, although the mine itself output fell by 20% and lead secure power rates that will enable it 70,000-72,000 t/y by 2004 or 2005. remains closed following the recent production was slightly higher. to operate profitably. According to a mudrush (MJ, July 7, p.10). Search Montana Resources spokesman, operations have continued for the Prosecutor General electricity is the single largest cost at Witkrans success three missing miners feared dead in the operation. Caussa Capital Corp. has recovered a the mine according to a spokesman for demands more Whereas the mine’s closure has 5.4 ct gem quality diamond in the mine operator Normandy Mining. money from Norilsk minimal significance for the copper course of trial mining at its alluvial The mill is treating stockpiled ore market, it has the potential to be diamond property at Witkrans, 120 from Bronzewing and ore from In the latest twist in the investigation significant for the molybdenum km west of Johannesburg in South Normandy’s nearby Mt McClure of the privatisation of Norilsk Nickel market as its output is equivalent to Africa’s Ventersdorp district. To date, operation. Mining will not resume (MJ, July 7, p.4), Russia’s Prosecutor around 3% of annual global 173 diamonds have been recovered until the state government and the General claims that Interros, the production.

28 Mining Journal, London, July 14, 2000 TECHNOLOGY TODAY

modes, including cover tunnel accounts receivable, assay and excavation control, wriggle surveys, quality tracing and management, and shaft sinking, tunnel refurbishment, maintain a marketing database. Mintek clearance control and non- MineMarket will also optimise destructive control of concrete layer shipping and logistics channels, says thicknesses including volumes. Mincom. MineMarket is a key The system is the result of a joint element of Mincom’s Enterprise magnesium development between Leica and Management Solution (EMS) which Swiss-based Amberg Measuring also includes components for supply Technique Ltd. It is based on the chain and quality management and Leica TPS1100 TCRM, a compact sales and shipping components. total station which features Mincom Ltd. Website: project reflectorless electronic distance www.mincom.com measurement technology. The on- At present, magnesium metal is magnesium, which is less than half board TMS PROscan software offers produced via two processes. The the number of ac furnaces required users a selection of six different OTR treads new thermal method operates at by a conventional thermal plant of 2D or 3D measurement modes and a temperatures of over 1,200oC and similar capacity. variety of parameter pre-settings. ground uses a metallothermic reduction Dr Nic Barcza, Mintek, South These features enable users to make reaction in which silicon and/or Africa. Tel: (+27 11) 709 4680. Fax: manual or automated measurements OTR Tyres Ltd says that the use of aluminium extract magnesium as a 709 2469. to any target surface from ranges of its Earthscan unit at the company’s vapour from the oxide. The other E-mail: [email protected] 1.5 m to 50 m. The TMS PROwin 7.0 headquarters in Alfreton in the UK process is based on fused salt software is Windows 95/98/NT has generated international interest electrolysis of anhydrous magnesium compliant and allows users to following a recent presentation at the chloride. CANMET undertake practice-orientated data Tyre Association of North America The thermal process offers several analysis. It also provides conference. The Earthscan unit is the advantages over the chloride process investigates computation functions to enable the only one of its kind in the world and in that the main feedstock is calculation of cross-sections, areas, uses ultrasonic examination dolomite which requires only narrow vein over and under-break and volumes. techniques to scan a tyre’s casing for calcining, unlike the electrolytic The system can export data in a defects and assess its condition for route which requires complex mining variety of file formats for use in CAD repair or retreading. purification to produce anhydrous systems. According to OTR, the unit magnesium chloride feed. The The Canadian Government is Amberg Measuring Technique enables it to overcome many of the reducing agent in the thermal funding a project by CANMET Ltd, Trockenlostrasse 21, PO Box 27, prejudices concerning the quality of process, ferrosilicon (or ferrosilicon- investigating ways of improving the 8105 Regensdorf-Watt, Switzerland. retread tyres, and it believes that aluminium), can be cost-effectively efficiency of narrow-vein mining. The Tel: (+41 1) 870 9222. Fax: 870 0618. establishing the integrity of tyre produced using a standard three-year study was initiated in Website: [email protected] casings, coupled with the lower submerged arc furnace utilising much September 1999 and is being running costs per hour of retread of the plant infrastructure at the undertaken by a research team tyres, should improve customer magnesium plant. However, the including specialists in mining MineMarket confidence in retread tyres. reducing agents are relatively costly engineering, mechanical engineering OTR Ltd, Bluebell Close, Clover and the furnaces operate under a and electronic/computer engineering. launched Nook Industrial Park, Alfreton, vacuum, necessitating batch The study team is based at DE55 4RD, UK. Tel: (+44 1773) 520 operation which lowers productivity. CANMET’s experimental mine near Enterprise software specialist 885. Fax: 520 882. E-mail: South African research Val d’Or in Quebec, and it has Mincom Ltd has launched its new [email protected] Website: organisation Mintek believes that already visited 16 mines in three MineMarket product. According to www.otr-tyres.co.uk the thermal process can be improved. provinces. At each mine the Nick Beaton, senior vice president of In conjunction with Anglo American, operation is studied and added to a the company’s mining, oil and gas South African electricity producer database of techniques and unit, the software is unique in that it Clough wins Eskom and the South African equipment used in narrow-vein offers an e-commerce-enabled Department of Arts, Culture, mining. The study team will then use solution providing “unprecedented CSA contract Science and Technology, Mintek has the information to determine the management and transparency of the decided to build a pilot plant to test operator’s needs in the total mineral processing supply chain Australian mining and construction its thermal magnesium process mechanisation and automation of from bedrock to boardroom”. company, Clough Engineering Ltd, (MTMP), developed as a result of mine methods and equipment. Mincom says that the software has been awarded a five-year work in the 1980s and 1990s. The The project has already produced integrates all aspects of mining and contract to co-manage the CSA process utilises a dc open arc furnace several ideas that may lead to mineral processing and includes copper mine at Cobar in New South and condenser which, Mintek says, is specific research projects. These attaching a value to a quantity of Wales. Clough will manage the far less capital intensive than the include new mining sequences, metal or coal throughout the whole operation in conjunction with the conventional electrolytic process equipment and non-explosive rock- production and logistic process mine operator/manager Cobar route for magnesium. It also breaking. The ideas will be made which, it believes, will improve users’ Management Pty Ltd. The contract reduces the operating costs of the available on a website to encourage responsiveness to the market. will include underground thermal route. Mintek believes that the exchange of information between MineMarket covers two broad development and ore production and it could become the most cost interested parties. functions: it models and monitors follows Clough’s four-month effective method of magnesium Jean-Marie Fecteau. Tel: (+1 819) mining, crushing, processing and contract at the mine last year when it production. 736 4331. Fax: 736 7251. Website: beneficiation; and enables mass carried out preliminary development The pilot plant is currently in the www.nrcan.gc.ca/mms/canmet- balancing and metal balancing. It work. design phase and testwork will be mtb/mmsl.htm also enables the reconciliation of data Under the terms of the new started between November 2000 and from weightmeters, stockpiles and contract Clough will use tele-remote April 2001. Mintek says the furnace orepasses to processed and measured loaders to mine some 2.8 Mt of of the test plant will be designed to PROFILE amounts. The system can place material. It will develop over 9 km of operate at between 0.5 and 1.5 MW values on metal or coal content from underground road ways and install and a condenser will be rated at 50- system from the start and transfer the value to the all ground support, mine 100 kg/h of magnesium metal. balance sheet. The second main infrastructure and associated According to Mintek, this setup will Leica function enables the sale of product services. enable the design of a commercial at any stage in the mining, processing Rob Jewkes, Managing Director, operation comprising one or more Leica Geosystems has introduced its and shipments process on the basis of Clough Engineering Ltd, 6th Floor, furnaces producing 1-2 t/h of new tunnel surveying system the long-term or spot contracts. The 251 St Georges Terrace, Perth, WA magnesium. Three to four such TMS Profile. According to the software has the capability to record 6000, Australia. Tel: (+61 8) 9281 furnaces would be required to company, the system has a variety of and categorise contracts, plan sales, 9281. Fax: 9481 6699. Website: produce around 50,000 t/y of applications in 2D or 3D measuring create invoices and pass them on to www.clough.com.au

Mining Journal, London, July 14, 2000 29 303 MINERAL MARKETS

their optimistic outlooks. Aluminium is viewed as the metal with the best funda- Gold slips after mental outlook, with smelter cutbacks in the US caused by high power costs having the potential to continue into next year. The forecast for copper is also promising, with auction strong demand from China particularly sig- nificant. Analysts are forecasting deficits The fourth of July celebrations in the US, a 6.4% in the first four months of the year for virtually all of the base metals this year net long position on Comex, a stronger US compared with the same period in 1999. and the supply shortfalls may well continue dollar and a weaker oil price were not the Production during the same period rose by into 2001. only factors behind gold’s slip from last only 3.4%. The ICSG says that “all five However, despite the positive forecasts, week’s high of almost US$290/oz. The other continents have experienced positive con- current prices are subdued. There appears contributing factor was this week’s Bank of sumption growth, with Europe and Asia to be an element of nervousness about the England gold auction. contributing most”. The ICSG notes that future of the global economy which has been The London morning gold fix immediate- at the end of June refined stocks of copper reflected by a reluctance of consumers to ly before the auction this Wednesday was on the LME, Comex and Shanghai metal raise their stock levels in line with their US$282.85/oz. The auction price, however, exchanges stood at 696,524 t compared with order books. A number of analysts warn of was US$279.75/oz and the 25 t of gold that 742,840 t at the end of May. The other spur potential pitfalls for metal prices. HSBC were on offer were oversubscribed by just to the copper price was the announcement believes that the consensus view is overly 1.3 times, the lowest level of interest since by Freeport-McMoRan that sales of copper optimistic and feels that in 2001, base metal the auctions started last year. According to were lower than forecast (this issue, p.27). prices are likely to be lower than current Kevin Crisp, precious metals analysts with After breaching US$1,800/t the copper levels. It points to the key role that the Credit Suisse First Boston, the level of price fell back slightly and Barclays momentum of economic growth has on met- interest in the auctions has been in decline Capital’s metals analyst, Kevin Norrish, al prices. Historically, says HSBC, when throughout 2000, but it had been hoped says that the price will have to breach economic growth has slowed, metal prices that the bottom had been set in the last auc- US$1,820/t to break out of its recent trad- have fallen. tion which was 2.7 times oversubscribed. ing range convincingly. The optimists believe that monetary Mr Crisp said that the latest auction Nickel continues to maintain its wide authorities in the US and elsewhere in the reflects the quiet and thin state of the cur- cash to three-months backwardation. world will be able to slow global growth to rent gold market, but he hopes that by the Although fundamental tightness is a major the extent that inflationary pressure will time of the next auction (on September 19), factor behind the backwardation, rumours abate and growth in industrial production the market will be a little more robust. are rife that long position holders are trying will be around 3.5-4%. This, they say, will As expected, the World Gold Council to squeeze a fund that is holding a 10,000 t keep metal markets in deficit and maintain (WGC) maintained its condemnation of the short position. Traders note that, despite upward pressure on prices. However, HSBC auction process, saying that the process is the apparent tightness of the market as evi- argues that this would imply a slowdown in losing British taxpayers money and giving denced by the cash to three-months back- away a cornerstone of British economic sov- wardation, cash to next week’s July date is LME PRICES & STOCKS ereignty. The WGC urges the UK trading at a US$6/t contango pointing to Government to abandon the gold sales but reasonable liquidity in the market. Prices (a.m.) July 13 July 6 if it chooses not to do so, it says that it Tonne basis Buyers Sellers Buyers Sellers should at least change the method of the COPPER Grade A Cash...... $1,785 $1,786 $1,763 $1,763.5 sales, to using either the London gold fix or Base metals survey Three months ...... $1,810 $1,811 $1,785 $1786 the Bank of International Settlements TIN Cash...... $5,445 $5,450 $5,445 $5,455 mechanism. The latter is used by the Swiss This week Reuters announced the findings Three months ...... $5,485 $5,490 $5,480 $5,485 Government to reduce its gold holdings. of its bi-annual survey of base metal price LEAD Cash...... $433 $434 $433 $434 In the wake of the auction result the forecasts. The survey of 28 analysts from a Three months ...... $463 $464 $448 $448.5 afternoon gold fix in London was variety of banks, brokers and independent ZINC Special high grade Cash...... $1,129.5 $1,130 $1,127.5 $1,128.5 US$279.95/oz. Where the price will go from research companies is encouraging. The Three months ...... $1,136 $1,137 $1,144 $1,144.5 here is difficult to say. Traders warned that tables set out the average price forecasts in ALUMINIUM Higher grade Cash...... $1,572.5 $1,573.5 $1,560 $1,560.5 a number of funds are holding long positions US cents/lb for 2000 and 2001. Three months ...... $1,567 $1,568 $1,583 $1,584 Alloy which may be liquidated should the price Cash...... $1,224 $1,227 $1,225 $1,230 fall below US$278/oz. 2000 Three months ...... $1,268 $1,270 $1,268 $1,273 Aluminium Copper Lead Nickel Tin Zinc NICKEL Cash...... $8,365 $8,370 $8,380 $8,390 Mean 72.6 83.1 20.5 404.8 254.4 53.0 Three months ...... $8,220 $8,230 $8,140 $8,150 High 75.6 90.0 22.1 469.5 269.0 56.0 SILVER Copper boosted Low 69.0 80.0 19.3 359.0 240.0 51.0 Cash...... $4.95 $5.00 $4.95 $5.00 Ye a r Three months ...... $5.00 $5.05 $4.00 $5.05 On the London Metal Exchange the three- to date 70.7 80.1 19.8 425.2 251.6 51.4 month copper price, after dipping lower at LME warehouse stocks on July 12 the end of last week, has managed to breach 2001 Stocks Stocks Aluminium Copper Lead Nickel Tin Zinc (t) (July 5) US$1,800/t aided by two pieces of positive Mean 75.9 89.2 21.9 367.8 259.5 53.7 COPPER news. In its July report, the Lisbon-based High 90.0 100.0 27.0 544.3 318.0 62.0 Grade A cathodes 528,650 543,300 International Copper Study Group (ICSG) Low 66.0 75.0 18.6 299.5 230.0 48.0 TIN 11,220 10,610 announced that the refined copper market LEAD 169,950 178,075 had a 46,000 t deficit in April compared All metals with the exception of nickel are ZINC SHG 216,600 221,475 with a surplus of 5,000 t in March. The forecast to move higher, with most analysts ALUMINIUM HG 494,075 508,125 deficit is the first recorded by the ICSG pointing to a continued expansion in the US Alloy 94,700 94,940 since mid-1996 and comes as a result of economy and more robust demand from NICKEL 17,346 18,870 strong growth in consumption. This rose by Europe, Japan and China as reasons behind SILVER – –

30 Mining Journal, London, July 14, 2000 MINERAL MARKETS economic growth from current levels of renegotiate long-term purchases from the all grades and forms. Even the technical around 6%, to 1% by next summer, and Chinese, as the lower prices will encourage squeeze on high-grade material appeared to that this slowdown would serve to push the Chinese to look at larger discounts. It is have disappeared by the end of the month as metal prices lower. generally expected that prices will pick up supplies appeared from stocks in later in the year. Rotterdam and the buying interest eased. Cadmium got caught up in the excite- Chromium prices, particularly for LME revises proposals ment, with sales as high as US$0.30/lb aluminothermic grade, improved a little reported for higher-grade sticks (min during June, with the disposal of the After receiving members’ comments on the 99.99%Cd). This increased activity was ini- remaining lots of Russian/CIS material London Metal Exchange’s proposed tially created by buying interest from China that were available in Rotterdam at restructuring (MJ, June 16, p.461), the amid reports that the Huludao zinc smelter US$4,300/t. Fresh supplies have yet to exchange’s board of directors have decided was to reduce its cadmium output by about arrive, and in the meantime the Chinese are to issue a document setting slightly modi- 70% as a result of mechanical problems at maintaining prices around US$4,600/t. The fied proposals for the restructuring. The one of its production units. The market market will probably hold at this level until document will also explain the reasoning response was surprising, given that the new supplies from Russia arrive in August behind the modifications and changes and smelter is only a minor cadmium producer. and September. the LME plans to hold an extraordinary The fundamentals for cadmium seem Cobalt, for once, was the poor relation of general meeting (EGM) in the second week unchanged particularly for standard com- the minor metals. Prices slipped further in of September. The EGM had been original- mercial grade (99.95% Cd) material for June, with sales reported as low as ly scheduled for July 27, but the LME says which the story is the same as it has been US$12.00/lb for 99.30% Russian-grade the revised schedule will enable the over the past year, with good availability material at the end of the month. There has exchange to achieve its twin objectives of and spot prices well below US$0.20/lb. Once been aggressive selling against a marked remaining transparent and allowing its again it appeared to be traders and specula- downturn in enquiries as most consumers members sufficient time to contemplate the tors creating an artificially higher market. are well stocked, particularly the Japanese, proposed changes. The supply surplus, worldwide, can only be who appear to have once again almost com- eliminated by major production cutbacks pletely withdrawn from the market in antic- and for the time being material continues to ipation of lower prices. Antimony climbs be freely available, particularly from pro- In the US, the Defense Logistics Agency ducers in Eastern Europe and South (DLA) awarded some 735,000 lb of cobalt higher America, in the US$0.10-0.20/lb range for granules to one buyer during June. The DLA approximated the value of this sale at At long last, some activity returned to the US$9.22 million and now has only about minor metals market during June but only LONDON PRICES 635,000 lb of cobalt that it can sell against for a few of the metals. The hope is, however, its 6 Mlb sales plan for the fiscal year ending that the increased activity will spread to all Metals Jul 13 September 30. of the metals. Aluminium (US producer) 63.00-66.00 c/lb d/d The next spot sale of cobalt will be held Antimony $1,500-$1,575/t cif Antimony led the charge, with prices Arsenic (Rotterdam 99%) $0.35-$0.45/lb on July 26 when the DLA plans to offer reaching US$1,500/t by early July. There Bismuth Bismuth $3.10-$3.30/lb cif around 350,000 lb of the metal. The quanti- Cadmium (99.99%) $0.18-$0.23/lb cif appeared to be little fundamental reason .. (99.95%) $0.16-$0.19/lb cif ty offered in August will depend on the Chrome (UK 99%) $9.00-$10.00/lb behind the sharp advance and it is claimed Cobalt (99.8%) $12.70-$13.90/lb net results of the July sale. The form of the that the increase is being orchestrated by .. (99.3%) $12.00-$13.00/lb net material for future sales has not yet been Germanium $580-$640/kg certain traders who are reporting exagger- Gold £186.60($280.65)/oz determined. The DLA has scheduled a Indium $110-$130/kg ated sales prices which are encouraging pub- Iridium (J Matthey price) $415/oz negotiated sale for September. If all the fis- lished quotations to be increased. This, in Magnesium (Norsk Hydro Euro. prod.) 2.33/kg* cal-year 2000 allocation is consumed by the .. (US Free mkt, 99.8%) $2,040-$2,100/t* turn, encouraged the Chinese to increase Manganese end of August, this sale may still be held metal (99.7%) $950-$1,000/t their offers, allowing traders to follow up Mercury (99.99%) $140-$150/flask with the award occurring in early October with further bids just below the market to Nickel $3.80-$3.81/lb as part of the fiscal-year 2001 programme. Osmium $400-$450/oz support it. This cycle is said to have contin- Palladium (J Matthey price) $671.00/oz Sale decisions by the DLA could be a key .. (Free market) $658.00-$668.00/oz ued throughout the month. As a result, oth- Platinum (J Matthey price) $557.00/oz influence on the movement of cobalt prices er traders are concerned that Chinese sales .. (Free market) $552.00-$560.00/oz over the next few months. Rhodium (J Matthey price) $2,450.00/oz agreed at previously lower levels around Ruthenium (J Matthey price) $160/oz cif Mercury at long last has started to pick Selenium $2.95-$3.40/lb cif US$1,100/t will not be shipped – as it is nor- Silver $5.01/oz up now that the Russian/CIS stockpiles mal practice with many Chinese suppliers Tellurium (UK lump & powder appear to be exhausted. This leaves the 99.95%) $4.00-$6.00/lb net to renege on contracts when markets move Tin (Kuala Lumpur) RM20.30/kg remaining few producers of primary mer- up. This, along with the Chinese now claim- Ore & Oxides Jul 13 cury, particularly the Spanish and ing restrictions on exports, could lead to Antimony (60%) $8.00-$8.50/t unit, cif nom* Algerians, in a strong position, and even further price increases. However, Beryl (10% BeO) $75-$80/s ton unit BeO cif* although demand is not increasing owing to Chrome (Transvaal, Friable 40%) $48-$70/t, fob* although last year official export licences .. (Turkish, concs 48%) $65-$70/t fob* the environmentally unfriendly nature of were issued to cover only 40,000 t, around Columbite (min. 65% comb. oxides) $3.10-$3.80/lb cif* mercury it is clear that restricted supplies Ilmenite (54% TiO2) A$100-A$115/t fob 85,000 t were exported. Whether the pat- Lithium ores (Petalite 4.2% Li2O) $180-$270/t fob* are pushing prices higher. Whereas the (Spodumene>7.25% Li2O) $385-$395/t fob* tern is repeated this year will depend on Manganese ore (48-50% Mn, Russian material had been freely available max. 0.1% P) $1.81-$1.90/t unit fob* how much metal is smuggled out of China; Molybdenum around US$125/flask, it is now difficult to smuggling is reportedly at lower levels than oxide (conc 55-57%) $2.80-$3.00/lb find good-quality mercury below Rutile (Aust. 95-97% in recent years. TiO2) A$760-A$885/t fob (bulk) US$150/flask. The producers, however, will Tantalum oxide (60% cif N. Euro port) $42-$52/lb Bismuth prices continued to subside, with Uranium (Nuexco unrestricted/restricted be careful not to push prices too high by regular offerings from China as low as U3O8) $7.00/$8.10/lb managing their production, otherwise sub- Vanadium (98% V2O5) $1.90-$2.10/lb cif US$3.10/lb. There is strong speculation, Wolframite (65%) $40-$45/t unit stantial quantities of secondary mercury however, that some Western producers are Zircon sand (std 66-67% ZrO2) A$560-A$660/t fob (bulk) are almost certain to appear again, particu- encouraging these lower prices whilst they * Source: Metal Bulletin larly from Eastern Europe.

Mining Journal, London, July 14, 2000 31 MINING FINANCE

The growth element in Alcoa’s strategy The cost of the Reynolds acquisition, was most apparent in the completion during which was effected by the issue of 1.06 Alcoa the period of the acquisition of fellow US- shares for each share in Reynolds, must be Alcoa based aluminium producer Reynolds brought into the reckoning from a share- Metals Co. The results for the June quarter holder’s perspective by assessing the dilu- include two months’ worth of the operations tive effect of issuing the additional shares. up on acquired, excluding those Reynolds assets The merger necessitated the issue of about earmarked for disposal (interests in three 68 million new shares at the start of May, alumina refineries and part of one smelter) worth US$4.36 billion, to bring the total as required by the competition authorities issued at June 30 to 865 million from 734 takeovers (MJ, May 5, p.341). The effect of the million a year ago (the latest figure is post a Reynolds acquisition was evident in the rise two-for-one split in June, and the compara- Aluminum Co. of America Inc. (Alcoa) in the group’s shipments of aluminium tive figure is adjusted accordingly). The kicked off the June quarter reporting season products to 1.36 Mt in the June quarter, 57% growth in total earnings compared this Tuesday, posting net earnings of compared with 1.13 Mt in the March quar- with the June quarter of last year was thus US$377 million, a 57% increase compared ter and 1.12 Mt in the June quarter of last restricted to the still-respectable figure of with the corresponding quarter last year. year. Shipments of Alcoa’s alumina and 47% on a per-share basis, to US$0.47/share, Perhaps just as impressively, the result was related chemicals actually fell slightly, to based on the average number of shares on a 6% improvement over the three months to 1.80 Mt in the June quarter from 1.83 Mt in issue in the respective periods. March 31, 2000 (MJ, April 14, p.293), the March quarter, and 1.84 Mt in the June Another negative effect of the Reynolds despite a 9% decrease in the spot price of period of last year, consistent with the omis- and Cordant acquisitions, and the assets aluminium in the June quarter (as quoted sion from the June 2000 figures of the refin- that they have added to Alcoa, is the neces- on the London Metal Exchange) and higher ing capacity due for disposal. sary assumption of the associated debt into energy costs. The Reynolds acquisition helped to raise Alcoa’s balance sheet. The group’s long- Alcoa’s chief executive, Alain Belda, revenues to US$5.57 billion in the June term debt stood at US$4.92 billion (includ- attributed the continued increase in earn- quarter, a 38% increase compared with the ing the portion due within one year), up ings to three factors: the company’s focus on corresponding quarter of last year, and 23% from US$2.72 million at the end of last year. profitable growth, its ‘business system’ and more than in the March quarter of this year The debt position has also been increased a continued concentration on cost control. despite the decline in primary prices. by the cash nature of the Cordant takeover: The group set a target in mid-1998 of reduc- Revenues were also boosted by the acquisi- Alcoa’s short-term borrowings increased ing its annual costs by US$1.1 billion, and tion during the quarter of Cordant almost ten-fold to US$3.40 billion at June by the end of June had achieved US$884 Technologies Inc., principally a manufac- 30, compared with US$343 million six million towards its goal. Alcoa noted that turer of aerospace components, for about months earlier. Cash and equivalents cost savings achieved in the June quarter US$2.2 billion in cash plus the assumption amounted to US$320 million at the end of would have been higher, but for the increase of US$685 million in debt. Cordant and its June, and short-term investments were on in worldwide energy prices, particularly for subsidiaries contributed one month’s worth the balance sheet at US$76 million. gas and fuel oil (aluminium production is of results to Alcoa’s June accounts, as part inherently energy intensive). of the ‘engineered products’ division. Rio Tinto opens SHARE PRICES AND EXCHANGE RATES North bid The cash takeover offer of A$3.80/share Company July 12 Change Local US$ mill. Company July 12 Change Local US$ mill. Local 5-day % % hi-lo Mkt cap. Local 5-day % % hi-lo Mkt cap. made by the Rio Tinto group for North Ltd of Australia opened this Thursday (July Alcan Aluminium (C$) .....47.25 31.1 8.5 00.0018 6,996 485 Norilsk Nickel (Rb)...... 209.93 74.66–2.1 13 00.0058 1,409 00 Alcoa ($) ...... 32.50 00.009.2 0.000.0024,9691132 28,276 Normandy Mining (A$) ... 00.000.96 0.0 00.0021 993 00 13). The offer is scheduled to close on Anglo Amer. Plat. (R)...... 196.00 00.003.2 0.7 00.0087 6,233 00 Norsk Hydro (NK) ...... 00.003.68 1.9 0.0 0060095 11,215 00 Anglo American (£)...... 34.59 7.8 60 21,366 North Ltd (A$) ...... 00.003.84 – 0..01.0 00.0091 1,672 00 August 14. AngloGold (R) ...... 266.00 0.0 00.00–0.7 16 00 4,187 Outokumpu () ...... 10.41 –1.0 14 1,231 Last Friday, Rio Tinto confirmed that Anglovaal Mining (R) ...... 23.35 00.00–2.3 0.0 00.0051 369 00 Pasminco (A$) ...... 00110.94 –4.1 0.0 00.0018 624 00 Antofagasta Holdings (£) 3.83 2.0 49 1,142 Pechiney ‘A’ ()...... 00.0049.60 12.3 0.0 00.0019 3,830 00 North’s announcement of its decision to Arch Coal ($) ...... 00.007.81 1.6 0.0 00.0028 298 00 Phelps Dodge ($)...... 00.0039.75 4.6 0.0 00.0010 3,129 00 Ashanti Goldfields ($) ...... 1.65 0.0 0 185 Placer Dome (C$) ...... 00.0013.80 –1.1 0.0 00.0018 3,046 00 reopen the Sept-Iles iron-ore pelletising Ashton Mining (A$) ...... 00.001.04 8.3 0.0 00.0089 198 00 Potash Corp. of Sask. (C$) 00.0080.20 –1.8 0.0 00.0064 2,849 plant in Quebec (MJ, July 7, p.3) does Asturiana de Zinc ()...... 10.06 00.003.7 0.0 00.0019 385 00 PT Tambang Timah (Rp)2600.00 00.000.0 00.0010 139 00 Barrick Gold (C$) ...... 27.05 00.001.1 0.0 00.0029 7,242 00 Rio Algom (C$)...... 17.75 2.0 0.0 00.0038 728 00 breach the conditions of Rio Tinto’s bid. BHP (A$) ...... 19.57 00.003.1 0.0 00.0063 20,489 00 Rio Tinto plc (£) ...... 00.0010.98 6.8 0.0 00.0035 18,502 00 Billiton (£) ...... 2.85 9.6 35 9,225 RJB Mining (£) ...... 00.000.56 –1.8 0.0 00.0070 123 00 However, Rio Tinto stated that it was not in Boliden (C$) ...... 00.002.08 18.2 0.0 00.0014 301 00 Stillwater Mining (US$) ... 28.56 4.8 29 1,100 a position to determine whether or not the Caemi Mineracao ...... 215.00 –2.3 91 468 Sumitomo Met. Min. (¥) .490.00 00.003.2 0.0 00.0079 2,601 00 Cameco (C$)...... 18.75 00.00 0.06003.3 28 00 716 Teck ‘B’ (C$) ...... 00.009.85 –3.0 0.0 00.0015 716 00 breach was of sufficient magnitude to war- Cleveland-Cliffs ($)...... 25.50 255 0011–1.7 28 00 273 WMC (A$) ...... 00.007.87 6.4 0.0 00.0063 5,313 00 Cominco (C$) ...... 19.70 00.00–1.7 0.0 00.0011 1,141 00 Xstrata (SF) ...... 388.00 00.00–5.6 0.0 00.0088 1,400 00 rant using the breach to withdraw its bid, as CVRD (BR) ...... 45.40 00.00–1.3 0.0 00.0074 10,114 00 North’s announcement “did not contain De Beers (Linked Uts) (£) 0.000.016.84 0.001.9 10,24464 10,163 Share prices and exchange rates are intra-day Wednesday. Eramet (Eur)...... 44.45 –0.4 23 1,017 100 in the high/low column indicates that the share is trading sufficient information for an informed Falconbridge (C$)...... 17.40 –8.7 2 2,083 at a high, 0 that it is at a low, based on local prices over the Freeport-Mc. C&G ($) ..... 00.009.38 –3.8 0.0 00.004 1,484 00 past 52 weeks. assessment of the financial impact”. 25.30 –3.6 42 1,687 Gold Fields Ltd (R)...... 00.00 0.0 00.00 00 Currencies July 12 Furthermore, Rio Tinto indicated that Grupo Mexico (MP)...... 32.30 00.000.9 0.0 00.0018 2,152 00 Hindalco (Rs) ...... 811.20 00.001.1 0.0 00.0042 1,352 00 Value of £ $(US) its main concern would be “significant HZL (Rs)...... 00.008.90 4.7 0.0 00.0013 0084 $ (US) ...... 0.05581.51 1.00— expenditure and commitments” by North Iluka (A$)...... 00.004.60 4.5 0.0 00.0078 607 00 $ (Australian)...... 0.2.5122.56 0.051.69 IMC Global ($) ...... 14.69 00.005.9 0.0 00.0028 1,682 00 $ (Canadian)...... 0.002.24 0.001.48 on port facilities and duplicative railway Impala Plat. (R) ...... 249.00 00.004.2 0.0 00.0061 2,420 00 Ringgit (Malaysian) Fixed official rate .. 5.75 3.80 Inco (C$) ...... 23.50 000.9 0.0 00.0013 2,889 00 Franc (Swiss) ...... 0.002.47 0.001.63 infrastructure related to the West Angelas Industrias Peñoles (MP) ..18.90 28.9014.5 19 440795 00 Krona (Swedish) ...... 0.0013.38 0.008.84 iron ore project in Western Australia during Iscor (R) ...... 12.90 14.807.5 0.0 00.0010 490 00 Yen ...... 163.09 0.00107.73 0.00 KGHM (Zt)...... 30.80 32.30–4.3 0.066 001,438 00 Rand (SA) ...... 0.0010.29 0.006.80 the “relatively short period of its offer”. A Lonmin plc (£)...... 7.91 6.659.1 0.0 00.00192 2,121 11, (Euro) ...... 0.001.59 0.001.05 MIM Holdings (A$)...... 1.01 86 00.001.0 21 00 1,025 Markka (Finnish) ...... 0.00 0.00 major aim of Rio Tinto’s bid is to take 5.15 –1.0 0 384 1=Mk5.94573 Minsur(PS)...... 00.00 0.0 00.00 00 Franc (French)...... 0.00 0.00 Mitsui Min. & Smlt. (¥)...823.00 00.00–0.1 0.0 00.0090 4,122 00 1=FF6.55957 advantage of the capital cost savings that Newmont Mining ($)...... 20.88 00.00–2.9 0.0 00.0033 3,504 Deutschmark ...... 1=DM1.95583 0.00 0.00 would be achieved by developing the pro- Noranda Mining(C$)...... 15.45 5.5 18 2,573 Source: Bloomberg ject with Rio Tinto’s existing infrastruc-

32 Mining Journal, London, July 14, 2000 MINING FINANCE ture. Such expenditure by North “would Montana Corp., following the withdrawal The acquisition is to be effected by the potentially be wasteful and would diminish of Phelps Dodge Corp. However, the latter payment of US$200,000 in cash and the the value of North to Rio Tinto”, assuming retains an interest in the project under the issue to Tethys Iberian Minerals Ltd, the the bid is successful. terms of the agreement whereby Canyon owner of Recursos Metallicos, of 7.50 mil- Rio Tinto also noted that the waiting purchased Phelps Dodge’s 72.25% holding lion new shares in Cambridge, bringing the period under the US Hart-Scott-Rodino in the joint venture, in return for a modest total issued to 46.48 million. The additional Antitrust Improvements Act of 1976 down-payment and extensive follow-up shares are scheduled to be admitted to AIM expired this Monday, indicating that the payments if the project were ever developed for trading on July 26. bid has not attracted adverse attention (MJ, October 3, 1997, p.276). This agree- As part of the deal, ownership of Recursos from the US competition authorities. ment with Phelps Dodge was modified on Metallicos will be transferred to Tethys by the entry of Franco-Nevada, such that José Fidalgo, who is to become a non-execu- Phelps Dodge would receive a payment of tive director of Cambridge. Dr Fidalgo, pro- Franco-Nevada leaves US$10 million on the issue of all necessary fessor of metallurgy at the Polytechnic Canyon to pursue permits to develop the project, or one third University of Madrid, is employed by of the proceeds of any successful ‘takings’ Recursos Metallicos as a consultant. Colin Seven-Up Pete legal action. Andrew, a director of Cambridge, has an This month’s out-of-court settlement indirect interest in Tethys via Georgia Canyon Resources Corp. of Golden, provides that Franco-Nevada will return to Holdings Ltd, which holds 33% of Tethys, Colorado, and Franco-Nevada Mining the joint venture all of its interests in the and the acquisition of Metallicos Recursos Corp. of Toronto have reached agreement to financing agreement, including the 4% therefore requires the approval of a majori- terminate their financing agreement with NSR royalty and the one-third share of any ty of shareholders in Cambridge other than respect to the Seven-Up Pete gold joint ven- ‘takings’, in exchange for the repayment of Mr Andrew. A vote is scheduled to take ture, in Montana. The settlement includes US$1 million of the US$3 million paid last place immediately after the company’s the dismissal by Franco-Nevada of its legal year. The US$500,000 bond will remain in annual general meeting on July 25. action filed against the joint venture in place until October 20, 2002, at which point Lomero-Poyatos is located in southwest- Denver in the middle of last month. The Franco-Nevada’s bond obligations will ter- ern Spain, in the Iberian Pyrite Belt. legal action had sought to rescind the minate. The president of Canyon, Richard Drilling and underground exploration have financing agreement, to return all funds De Voto, said that the company is “disap- established indicated resources, split into paid by Franco-Nevada under the agree- pointed that Franco-Nevada has with- two categories of mineralisation: massive ment and to recover damages. drawn”. Canyon retains its belief in its case sulphides totalling 4.25 Mt, at 5.76 g/t Au, The financing agreement between the against the State of Montana, and appears 116.9 g/t Ag, 1.58% Cu, 5.71% Zn and two companies was made in May of last determined to proceed. 1.48% Pb; and semi-massive sulphides year. Under the agreement, Franco-Nevada Franco-Nevada recently agreed to merge totalling 11.2 Mt, at 2.29 g/t Au, 70.8 g/t agreed in late 1999 to advance to the Seven- with Gold Fields Ltd of South Africa in a Ag, 1.26% Cu, 3.02% Zn and 0.98% Pb. Up Pete joint venture US$3.0 million in major all-share deal (MJ, June 16, p.461). Tethys has carried out a preliminary evalu- cash, and to commit US$500,000 to main- ation of the resource, based on open-pit tain an existing environmental reclamation mining, and further modelling is in bond, to allow the joint venture to maintain Cambridge plans move progress. its property rights in the project and to pur- into Spain The Salamon and Falle de Leon prospects sue a ‘takings’ legal action against the State are in Leon Province, northwestern Spain. of Montana (MJ, October 8, 1999, p.295). Trading of shares in Cambridge Mineral Salamon is the subject of a joint-venture This legal action followed the state’s I-137 Resources plc on London’s Alternative agreement for Recursos Metallicos to earn a initiative effectively banning the use of Investment Market (AIM) resumed this 50% interest from Sociedad de cyanide (MJ, November 20, 1998, p.407). Monday (July 10), closing at £0.185/share Investigación y Explotación Minera de The joint venture holds property including before subsiding slightly on Tuesday to Castilla y Léon SA (Siemcalsa), a state- three deposits, including the McDonald £0.175/share. Trading in Cambridge had sponsored company that holds the mineral project, located near Lincoln. Development been suspended on June 15, at rights, by spending US$1.2 million over two has been prevented, according to Canyon, £0.1775/share, pending the company’s years. The prospect has inferred resources of by I-137. Franco-Nevada advanced the nec- announcement of its proposed acquisition 433,000 t, at 7.86 g/t Au. The Falle de Leon essary funds to the joint venture in return of Recursos Metallicos SL of Spain. The property surrounds Salamon (and inciden- for the right to receive a 4% net smelter deal is classified as a reverse takeover under tally adjoins ground held by the Rio Narcea returns (NSR) royalty on any mineral pro- AIM rules and thus required that suspen- Gold Mines Ltd-Barrick Gold Corp. joint duction, or one third of the proceeds of any sion be requested by Cambridge. Recursos venture). Falle de Leon is also the subject of ‘takings’ action. Metallicos’ principal assets are three miner- a joint-venture agreement with Siemcalsa, Although referred to as a joint venture, al projects in Spain: the Lomero-Poyatos which has carried out preliminary explo- Seven-Up Pete is 100% owned by Canyon polymetallic project, and the Salamon and ration work. Under the terms of the joint and its wholly-owned subsidiary, CR Falle de Leon gold prospects. venture, Recursos Metallicos can earn a

HeapLeach.comHeapLeach.com

Mining Journal, London, July 14, 2000 33 MINING FINANCE

50% interest by spending US$800,000 over post its formal response to shareholders no offering Antofagasta the opportunity to three years. later than next Monday (July 17). The offer borrow against this asset in future if it so Cambridge retains its interests in explo- is due to close on July 28. Winspear’s board chooses. Antofagasta notes that the release ration projects in Ireland, the Falkland of directors meanwhile “strongly urges was achieved 18 months ahead of schedule, Islands and Scotland. shareholders not to make any decision” which highlights the strong early perfor- with respect to the offer, which it believes mance of the project, commissioned in “significantly undervalues” Winspear. This November last year one month ahead of the Market news week, the company released an updated original plan. The early release from the scoping study of its Snap Lake project in the loan guarantees was signalled three months Swiss-based Xstrata AG has secured a Northwest Territories (this issue, p.27), as ago by the chief executive of Antofagasta’s US$300 million revolving credit facility, part of its “value recognition programme”, mining arm, Jean-Paul Luksic (MJ, March principally arranged by Credit Suisse First and announced that it is opening a data 31, p.257). Los Pelambres produced 146,000 Boston and Société Générale, which the room under a confidentiality agreement t of copper in the first half of this year and, company intends to use to refinance its basis to qualified companies. with the plant operating at 12% over its existing three-year loan facility. The new Los Pelambres, the copper mine in Chile planned capacity, full-year output is now facility comprises two tranches, each of owned 60% by London-listed Antofagasta forecast at over 300,000 t (MJ, June 16, US$150 million. The first has a five-year plc and 40% by a group of Japanese compa- p.470). This is well ahead of the 271,000 t/y term, and the second a one-year term com- nies, has satisfied the terms of a completion originally planned for the first five years of mitted, plus a three-year option. Loans guarantee provided by Antofagasta. The project life. drawn down under the new facility will bear guarantee was made in favour of the banks London-listed Randgold Resources Ltd interest at 40-65 basis points (100 bp = 1%) and other institutions that provided finance has completed the proposed sale of half of over the London Inter-Bank Offered Rate, for the project. Antofagasta is now released the company’s 80% interest in the Morila depending on certain financial ratios. The from the obligations prevailing under that gold project in Mali to AngloGold Ltd of facility is syndicated through seven other guarantee, the most significant immediate South Africa for US$132 million, and the banks. Xstrata believes that the new loan consequence being the release of US$133 two companies have agreed the terms of the facility, plus the proceeds of recent non-core million set aside by Antofagasta in an joint venture that will manage the project disposals, will give it the funding ability to escrow account to cover overruns, etc. (MJ, April 7, p.275). AngloGold and “pursue growth opportunities”. These funds can now be put to other uses. Randgold will each have 40% of the project, Vancouver-based Winspear Diamonds Inc. The guarantee also provided the lenders with the Government of Mali holding the has received the hostile takeover offer with a charge over Antofagasta’s 33.6% balance of 20%. Final agreement follows announced by the De Beers group two shareholding in a non-mining associate, the approval last month of shareholders in weeks ago (MJ, June 30, p.497), and will Quiñenco SA. This charge is also released, Randgold Resources. Randgold has

NOW PUBLISHED BY The Author MINING JOURNAL BOOKS LTD Phillip Crowson graduated from Cambridge in 1961 with a first class honours degree in Economics. After ten years working as an economist in various companies in the UK chemical industry he joined the Economics Department of what was then Rio Tinto Zinc Corp. He became head of the department, and the MINERALS company’s chief economist in May 1981, a position he held until his retirement at the end of 1996. He was a director of several subsidiary companies, lectured frequently, and took an active role in many organisations in the mining and metals industries. Phillip Crowson has continued to add to his many published HANDBOOK papers and articles, and is an invited director of the London Metal Exchange. 1998-99 For each of 52 minerals the following information is provided: — World reserves and reserve base — End-use patterns Statistics & Analyses of the — World production — Value of contained metal World’s Minerals Industry — Productive capacity — Substitutes and technical possibilities — Secondary production —Annual average prices — The adequacy of reserves —Marketing arrangements Phillip Crowson — Consumption —Supply and demand by market area

Available at the price of £95 (US$170), from Mining Journal Books Ltd, PO Box 10, Edenbridge, Kent TN8 5NE, UK. Fax: (+44 1732) 865747

34 Mining Journal, London, July 14, 2000 MINING FINANCE received the sale consideration, and has man and chief executive of Golden Star repaid a R312.3 million bridging loan Resources Corp., and has held senior posi- advanced by Barnato Exploration Ltd, People tions with Homestake Mining Co. and another company originally in the Kebble Amax Inc. stable. The chief executive of Randgold The Queensland State Government has Robert Yeoman has been appointed vice Resources, Mark Bristow, said this week made Ted Campbell Director General of the president of corporate development by that after settling all current liabilities, the Department of Mines and Energy, subject Expatriate Resources Ltd of Vancouver, company would be left with US$90 million to the approval of the executive council, effectively replacing Douglas Goss who held of the sale proceeds which it intends to replacing Ron Boyle who died in April. Dr the post of vice president of business devel- apply to “new growth opportunities”. Campbell is promoted from Deputy opment. Mr Yeoman, currently corporate The London-based mining group Anglo Director General. secretary of Caussa Capital Corp., will also American plc has agreed to dispose of a 68% Tom Dale has been appointed as chief be nominated to join Expatriate’s board at shareholding in LTA Ltd, a Johannesburg- executive of Mopani Copper Mines plc, the the company’s annual general meeting on listed engineering, construction and project joint-venture company established earlier June 28. Expatriate has also appointed management group, specialising in mining, this year by Glencore International AG Justin Himmelright manager of environ- petrochemicals and infrastructure projects. (46%-51% voting), First Quantum ment. Mr Himmelright, who joins from The sale is the latest in a long list of non- Minerals Ltd (44%-49% voting) and state- Knight Piésold, will be responsible for the core disposals by Anglo American (MJ, owned Zambia Consolidated Copper Mines company’s environmental programmes, and March 24, p.233). The sale agreement takes Ltd (10% carried) to operate the Mufulira for securing the relevant permits for its the form of an irrevocable undertaking by mine, concentrator, smelter and copper Finlayson project in Yukon Territory. Anglo American to tender its shares to a refinery, and the Nkana copper mine, con- The US National Mining Hall of Fame R46/share takeover offer for 100% of LTA centrator and cobalt plant in Zambia. Mr has announced its nominations for 2000. from Aveng Ltd, another Johannesburg-list- Dale will take over from Philip Pascall, who Eight persons are to be inducted, to bring ed construction company which also has has served in the role of interim chief execu- the total of those “enshrined as leaders of interests in steel distribution and cement tive since April 3, when Mopani formally the mining industry” to 159. This year’s manufacture. Anglo will receive about R900 took control of the newly privatised assets nominees include one living person, John million in cash for its LTA shares. (MJ, April 7, p.263). Mr Pascall moves to Livermore, who was “a driving force behind The positive effects of the privatisation of the position of non-executive chairman of the 1961 discovery of the Carlin gold mine the Zambian copper mining industry are Mopani. Mr Dale is a well-known figure in in Nevada”. The posthumous nominees already being felt by the industries that South African mining circles, until last include the three Kelce brothers, “who led supply the operations. Last Friday, the September serving as managing director of Peabody Coal to become the nation’s largest Zambian Government announced that it the South African operations of Gold Fields coal producer”; David Skillings Jr, who was has distributed K292 billion (US$1 = Ltd, one of the world’s largest gold produc- editor and publisher of the weekly Skillings K3,175) to creditors of state-owned Zambia ers (MJ, September 10, 1999, p.211). Mining Review until his death last year; and Consolidated Copper Mines Ltd (ZCCM), Australian-based Ashton Mining Ltd has Simon Strauss, “an authority on the world’s out of a total of K423 billion set aside for the appointed Justin Gardener as non-executive metal markets” and author of ‘Trouble in purpose in the government’s 2000 budget. chairman, replacing Paul McClintock who the Third Kingdom’. The ceremonies will The Secretary to the Treasury, James resigned last month following his appoint- be conducted at a black-tie dinner at the Mtonga, issued a statement reiterating the ment as head of the Cabinet Policy Unit of Las Vegas Hilton on October 8 (on the eve government’s commitment to clear all of Prime Minister John Howard’s administra- of the MINExpo conference). ZCCM’s trade creditors “in full as soon as tion (MJ, June 2, p.440). Mr Gardener is a possible”. The Zambian Government has former member of the board of partners of Wanted - Mineral Projects not detailed ZCCM’s obligations to trade Andersen, the international consulting and Producer looking for advanced base or creditors, but the group’s balance sheet at accountancy group. precious metal projects with real March 31, 1999 showed accounts payable at Dia Met Minerals Ltd of Canada has potential to produce. Email brief details K527.9 billion, of which K439.9 billion was appointed James Rothwell as president and to: owed on goods and services, K30.2 billion on chief executive with effect from August 15, [email protected] metal trading and K14.3 billion on finance replacing James Eccott who is retiring. Mr leases. Rothwell was formerly president of BHP METALLURGICAL MANAGER/ The Australian-based zinc producer Diamonds Inc., part of Broken Hill GENERAL MANAGER Pasminco Ltd has received A$22.95 million Proprietary Co. Ltd of Australia, Dia Met’s We have an immediate requirement for a senior metallurgist, experienced in gold CIP/CIL/heap leaching to as settlement of an insurance claim with 51% partner in the Ekati™ diamond mine take charge of a new project in Asia. The operation involves both treatment of run-of-mine ore and tailings retreatment respect to the company’s Elura operation in in Canada. Dia Met holds a 29% interest in and applicants should be suitably senior to assume the post as the project’s General Manager. Terms and conditions are New South Wales. The sum represents a the mine, Canada’s first diamond producer. a senior package and the appointment is on married status. settlement of A$25 million, less amounts Brisbane-based MIM Holdings Ltd is Please send an up-to-date CV, quoting Ref No 4846, to: Dennis Thomas, Thomas Mining Associates, P.O. Box 2010, already paid and other deductions, to com- expanding the role of its group executive for Lancing, West Sussex BN15 8HZ, UK. Tel: +44 1903 753511. pensate for a collapse in the Elura mine in operations in Australia, Vince Gauci, to Fax: +44 1903 753510. E-mail: [email protected] 1996 (MJ, March 22, 1996, p.215). cover all of the company’s operations world- SENIOR ENVIRONMENTAL ENGINEER Pasminco expects to book a gain of A$16.5 wide. MIM’s chief executive, Nick Stump, Minimum 10 years exp in environmental engineering with at least 1-2 years working in South America. Consulting position. (Ref.258) million (A$11 million after tax) in its said last week that the move will extend the HEAP LEACH SPECIALIST Expert required to consult on heap leach projects. accounts for the year to June 30, 2000. contribution Mr Gauci has made to the Spanish speaking preferred. (Ref.257) Barrick Gold Corp. of Canada has posted operating performance of MIM’s assets in PROJECT MANAGER Based in UK, qualified metallurgist or process engineer required to its takeover offer to shareholders in Pangea Queensland to the company’s European oversee projects – Min 10 years project exp. (Ref.267) Goldfields Inc. (MJ, July 7, p.1). The board operations and to its 50% interest in the Please email c.v.’s to Sandie Fforde or Dick Sanders of Pangea has recommended that share- Bajo de la Alumbrera copper-gold mine in Visit www.hunterpersonnel.com FOR THE COMPREHENSIVE LIST OF VACANCIES AND THE FULL RANGE OF SERVICES THAT WE OFFER holders accept, and all directors and officers Argentina, which MIM manages. Hunter Personnel Contracts Ltd Abchurch Chambers, 24 St Peters Road, of the company have pledged their shares to Colorado-based Canyon Resources Corp. Bournemouth, BH1 2LN, U.K. the offer, collectively accounting for 20%. has appointed David Fagin as a non-execu- Tel: +44 (0)1202 298322. Fax: +44 (0)1202 298383 The offer closes on July 28. tive director. Mr Fagin was formerly chair- Email: [email protected]

Mining Journal, London, July 14, 2000 35 THE ECONOMIC DEFINITION OF MJRS

Mining Markets Research & Services ORE • Current Market Conditions This radical and scholarly book by Ken Lane, mathematician and • New Sales Opportunities mining consultant, presents the theoretical • Product Launch basis for the definition of ore and a series of Case • Seminar Management Studies for its practical application. The work is • Financial Prospectives based on his long experience of mine • Global Market Survey design for large scale international operations- particularly for MJRS Ltd. is managed by mining people who Rio Tinto. It is work with you to understand and resolve your essential reading for mining geologists and marketing & research issues. mining engineers - both at the mine and in the consulting office. It will MJRS Ltd - Information that works also be very important to everyone concerned with please visit: www.mjrs.com conservation studies. Available from: Mining Journal Books Ltd., P.O. Box 10, Edenbridge, Kent TN8 5NE England. Price: GBP25 (USD46) MJRS Limited, Abchurch Chambers, 24 St. Peter’s Road, Bournemouth, BH1 2LN, UK by airmail. Cash with order please. Tel: +44 (0)1202 317 132 • Fax: +44 (0)1202 298 383 • E-mail: [email protected] ISBN 0 900 117 45 1

Now includes monthly updates

40% A text database containing over 19 years f DISCOUNT of articles from the leading international or Mining J mining publications. subscribersournal

Worldwide Mining+ costs US$597/£347 (or US$345/£197 for Mining Journal subscibers). To order your copy, or for further information, please contact us or visit our website: www.mining-journal.com | [email protected] | tel: +44 (0) 20 7216 6060 | fax: +44 (0) 20 7216 6050

Published by The Mining Journal Ltd, 60 Worship Street, London EC2A 2HD, England. Typeset and printed in Gt. Britain by Pensord Press Ltd, Gwent. Registered as a Newspaper with the Post Office.