14 November 2007
Ndola — FIRST Quantum Minerals (FQM) has announced that operating profit increased by 19 per cent to $546 million at Kansanshi Mine in Solwezi at the end of nine months.
According to FQM reports operational and financial results for the three months and nine months ending September 30, 2007 released yesterday by FQM president, Clive Newall, the increase was despite processing of low-grade ore.
"Kansanshi's average cash unit cost of production increased by two per cent and the average total unit cost of production increased by four per cent compared to the same period in 2006," Mr Newall said.
The report says the decision to process lower grade ore and higher acid consuming mixed ores through the leach circuit, resulted in need for external purchases of a significant quantity of acid at a much higher marginal cost, increased ore and processing costs.
"Increases in oil-based consumables, electricity and wage costs all contributed to the increased ore and processing costs. In addition, ore costs were negatively impacted by the adoption of a new deferred stripping policy from January 1, 2007," Mr Newall said.
During the same period, Kansanshi net sales increased 28 per cent to $781.5 million as capital expansions resulted in increased production. Net sales, compared to the same period in 2006, rose as a result of increased copper production and higher copper prices.
"Despite the processing of lower grade ores, production increased (up to 15 per cent to 112,812 tonnes) due primarily, to the 15 per cent increase in oxide and 34 per cent increase in sulphide ore processed as compared to the same period in 2006," he said.
And despite higher operating costs during the third quarter of the year, FQM reports that Kansanshi Mine operating profit increased 32 per cent to $222.3 million and increased net sales by 38 per cent to $316.1 million.
"Net sales, compared to the same period in 2006, increased as a result of a 26 per cent increase in the tonnes of copper sold and an increase in the realised copper price," Mr Newall said.
He said copper production increased 28 per cent compared to the same period in 2006 due, primarily, to an increase of five per cent in oxide and 38 per cent in sulphide ore processed as a result of the throughput expansions at Kansanshi.
"In addition to the positive impact of these expansions, the high pressure leach system became operational during the quarter, which contributed 1,291 tonnes of cathode production. "Total sales volume was higher than production at 41,919 tonnes primarily due to 845 tonnes of sales from copper in concentrate stockpiles," Mr Newall said.
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