Modern Mining April 2015

COUNTRY FOCUS – ZAMBIA

Royalty debate in Zambia raises stakeholder issues According to SRK Consulting, the recent raising of mining royalties by the Zambian government – to replace the 30 % corporate income tax on mines – and the vociferous reaction to this move by the country’s mining companies is an indicator that stakeholder relationships are not what they should be.

A lthough it seems almost certain that the Zambian government will reduce the royalty increase (and may well have done so by the time this article is in print), the royalty issue has raised important ques- tions. “Partnerships between governments, mining companies, communities and other stakeholders are increasingly an important fo- cus for consulting engineers,” said SRK prin- cipal mining engineering consultant Boniface Mwila, “as these relationships form the foun- dation for mine viability and sustainability. “Our services in providing pre-feasibility, feasibility and due diligence reports for cli- ents – which focus on the viability and value of mineral projects – must make predictions about future conditions affecting an opera- tion. Clearly, this is made more difficult if there is the possibility that royalties or taxes will change substantially over the life of the mine.” At the same time, said Mwila, countries

reserve the right to change these rates as part of their national economic policies. “In the case of Zambia, government has justified the move as a bid to achieve a more equitable distribution of the mineral wealth between government and the mining com- panies,” he stated. “It also says the royalty is easier to implement than corporate tax; it has in the past expressed concerns that many compa- nies understate their profits by using off-shore corporate structures that charge the local com- pany high fees for services like management and marketing.” Industry has in return warned that jobs will be lost, arguing that most Zambian mines are not profitable due to the low commodity prices. This is clearly a high-stakes clash, as cop- per mining contributes a direct 9 % of GDP and almost 70 % of the country’s export earn- ings, said Mwila; this is important revenue for government, which is keen to narrow the fis- cal deficit which doubled in 2013 due to more

Boniface Mwila, principal mining engineering consul- tant, SRK Consulting.

Dust suppression solution provided at Kansanshi The largest copper mine in Africa is report- edly making a measurable contribution to environmental sustainability and the health and safety of nearby communities through the adoption of an innovative dust suppression solution developed by I-CAT Environmental Solutions.

tation of RDC 20 on temporary roads, particularly around pit areas, has mini- mised this potentially catastrophic hazard. “When sprayed onto a gravel road surface, RDC 20 forms a durable cross linkedmatrix that binds fine soil particles into larger heavier particles, which are less prone to become airborne,” van der Merwe says. The nearby town of Solwezi has a pop- ulation of around 65 000 people, and RDC 20 has significantly reduced the threat of illnesses caused by dust pollution. In addition to the proven success at Kansanshi, I-CAT reports it has received overwhelmingly positive feedback from other Southern African mines where the product is applied, and especially where I-CAT is contracted to manage the dust control on mine roads. “The over- all ambient dust at our largest operation in the Northern Cape has improved by more than 40 per cent, when compared to the readings prior to I-CAT managing

to nearby communities. However, a dis- advantage is an increase in dust – which impacts negatively on human health and safety, the surrounding environment and reduces the lifespan of machinery. In order to proactively overcome this challenge, Kansanshi mine has been mak- ing use of the RDC 20 dust solution since 2011. I-CAT Operations Director Anton van der Merwe explains that RDC 20 is a water soluble anionic polyelectrolyte polymer comprising an exclusive formulation of blended emulsified co-polymers and ionic modifiers.“RDC 20 is produced fromnatural substances and features no petrochemical or hydrocarbon ingredients, making it 100 per cent eco-friendly,”he says. The high volumes of heavy duty and standard commercial vehicle traffic on dirt roads generate excessive dust, which severely reduces visibility. The implemen-

First QuantumMinerals’Kansanshi mine is located approximately 10 km north of the town of Solwezi. The mine has under- gone several expansions since it began operating in 2005. From an initial produc- tion capacity of 110 000 tonnes of copper, Kansanshi is now capable of producing 340 000 tonnes of copper and more than 120 000 ounces of gold per year. A multi-stage expansion project aims to increase copper output capacity to approximately 400 000 tonnes by 2015. This considerable expansion offers numer- ous financial and socio-economic benefits feature

46  MODERN MINING  April 2015