CANADIAN-BASED Dundee Precious Metals Inc, the owner of Namibia Custom Smelters (NCS), is preparing to construct a N$1,7 billion sulphuric acid plant at its Tsumeb smelter.
The acid plant will convert all the smelter's sulphuric dioxide emissions into commercial sulphuric acid.
After the company ran into trouble with the Tsumeb community and the Ministry of Environment over alleged hazardous pollution caused by the smelting of Bulgarian copper earlier this year, Dundee said it wanted to bring the smelter up to internationally accepted environmental standards, and consistent with directives issued by the Ministry of Mines and Energy.
The company said the sulphuric acid plant is the "best solution" to capture and process the off-gasses from the copper smelter, which would reduce emissions and considerably improve working and living conditions around the smelter.
Dundee will finance the projects.
"These important capital initiatives and commercial arrangements not only illustrate our commitment to the health and safety of the Namibian people, they also reposition NCS as a sustainable and profitable enterprise that will benefit our stakeholders," president and CEO of Dundee Precious Metals Jonathan Goodman said.
The acid plant will be set up at an estimated cost of US$204 million by Finnish engineering company, Outotec. Construction will start in 2013 and the acid plant will be completed during the third quarter of 2014.
During the construction phase of the project hundreds of jobs will be created.
Dundee said based on expected annual smelter production capacity, the plant is anticipated to produce 230 000 to 320 000 tons of sulphuric acid.
The company has entered into a long-term purchasing agreement with Rio Tinto Rössing for the acid the NCS will produce.
Rössing is currently importing sulphuric acid for processing at its mine in the Erongo Region.
With the Dundee deal, acid will be shipped by rail directly to Rössing from the NCS. Dundee and Rössing are currently negotiating the finalisation of the agreement during the first quarter of next year.
The NCS has also entered into an agreement with Louis Dreyfus Commodities Metals Suisse (LDC) SA, an exclusive concentrate supplier and blister off-taker for an additional 200 000 tons of third-party copper concentrate to be supplied by LDC from 2014 to 2016.
In addition, Dundee plans to install an electric holding furnace to temporarily store and upgrade copper matte until it is transferred to a converter furnace for final processing.
This will be constructed at an estimated cost of US$66 million, which includes a US$10 million contingency. Construction on this furnace will also start next year, and completed in late 2014 or early 2015.