8 January 2013

Namibia: Tsumeb Smelter to Sell Acid Locally

Windhoek — Dundee Precious Metals (DPM) says it will proceed with investments to curb acidic emissions and bring the smelting operations at its Tsumeb Smelter in line with the recommendations from the Ministry of Environment and Tourism.

The company has been in the thick of things since allegations of acidic pollution to the environment and residents of Tsumeb and surrounding areas first emerged. This resulted in a number of government-sanctioned investigations and the subsequent recommendations from the government on the operations of the smelter processing plant.

The Canadian company says it will continue to fund significant capital projects, as well as commercial developments related to a new concentrate tolling arrangement and a Memorandum of Understanding for the sale of acid.

The implementation of the fugitive dust management improvement project, that would improve the off-gas capture and workplace conditions in compliance with national standards, is substantially complete with commissioning expected to take place this month the company says.

DPM has also entered into a definitive turnkey fixed-price Engineering, Procurement and Construction Management (EPCM) contract with Outotec for the construction and installation of a sulphuric acid plant at the smelter. Construction is expected to begin in early 2013 and is scheduled to be completed in the third quarter of 2014.

Outotec is a Finnish engineering firm and the global leader in sulphuric acid plant design and delivery. The capital cost on a fixed price basis is expected to be approximately US$204 million (about N$1.6 billion). The acid plant was determined to be the best solution to capture and process the off-gases from the copper smelter, and, in turn, reduce emissions and considerably improve working and living conditions around the site.

The acid produced from this plant is expected to be sold to domestic and international markets primarily through long-term, off-take agreements. Based on expected annual smelter production capacity, the plant will produce between 230 000 and 320 000 tonnes of sulphuric acid in conjunction with Protea Chemicals (Pty) Limited, a leading industrial chemicals company with significant presence in Sub-Saharan Africa.

The smelter has also entered into a Memorandum of Understanding with Rio Tinto Rössing in connection with a long-term purchase arrangement for the acid. Rössing currently imports sulphuric acid for processing at its uranium mine near Arandis. The acid would be shipped by rail directly to Rössing from Tsumeb and DPM and Rössing are currently negotiating the commercial details and expect to finalise definitive documentation during the first quarter of 2013.

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