eBusiness Weekly
Business Writer
Zimbabwe Nickel Exploration Co is planning to invest about $340 million towards re-opening Empress Mine in central Zimbabwe and building a processing plant, sources have disclosed.
Previously owned by Rio Tinto plc — now RioZim — the mine closed in 1983 due to viability challenges resulting from low metal prices. Its mining claims were pegged as open ground in 2004 after the previous holder surrendered the claims to State in 1997.
“A programme of raising funding from Europe, particularly in the UK and Australia is underway,” said one source who declined to be named as the matter is confidential.
The development of the mine will be done in phases, starting with the injection of about $20 million. Phase two and three will require $32 million and $92 million respectively to fully re-open the mine, another source told Business Weekly.
“Additional substantial” investments would be made to set up a processing plant.
The company is projected to produce an average 3 500 tonnes of concentrate per month during the first year of production and ramp up output to 21 000 tonnes by fourth year.
Thereafter, the processing plant to produce high value nickel sulphur would commence operations with initial annual output of 10 000 tonnes expected, the sources said.
Efforts to get an official comment from ZNEC were fruitless by the time of going to print.
Funding options
Zimbabwe mining industry is poised for a boom, driven by a wave of foreign investments, which will see a jump in production at existing operations and new mines.
Already, the country is finalising a new mining policy targeting to grow the industry to $17 billion by 2030. At $17 billion, the industry will have grown to more than the current size of Zimbabwe’s gross domestic product estimated at $14 billion.
While the company was looking for funding in Europe and Australia through debt financing and equity, ZNEC would also seek a listing on the Zimbabwe Stock Exchange.
“It is something that is under consideration and that will enable locals to also have shares in the company,” the source said.
“The project will require a lot of money and we will exploit all possible avenues to raise that money so that it (the project) will take off.
National Project Status
ZNEC will seek National Project Status and tax concessions to make it viable.
“Apart from low commodity prices, the other challenge was viability of the mine was low ore grades and tax concessions would be sought from the authorities”, the source said.
Rio first operation outside Europe
Empress was established in 1968 based on a proved and probable ore reserve of 20 million tonnes. The mine’s initial production was 55 000 tonnes per month from underground mining.
Two years later, the opencast came into production and production went up to 85 000 tonnes.
In 1976, the opencast closed after reaching its deepest viable. Empress closed down in 1982.
Rio Tinto cited significant decline in nickel prices and the mine could not continue in such difficult economic environment.
The mine employed about 1 400 workers who were retrenched despite a government bailout to help save the jobs.
The government wanted to keep the Empress Nickel Mine running open until 1986.
However, the closure was sealed in 1983 and has remained closed. At the closure of the mine both township become a ghost city.
