Vale and African Rainbow Minerals (ARM) initiated construction of their Konkola North underground copper project on the Zambian Copperbelt in August 2010. The companies are 50:50 joint-venture owners of Konnoco Zambia, the operating company developing the project. Design throughput is 2.5 million mt/y of ore at an average mill head grade of 2.3% copper, yielding 45,000 mt/y of copper contained in concentrate to be toll smelted in Zambia. Total project capital is estimated at about $400 million.

Commissioning of the Konkola North concentrator is scheduled for late 2013, and the project is planned to reach full production in 2015. Expected mine life is 28 years.

Initially, Konkola North’s South and East Limb mines will be developed, after which deeper, higher-grade, and wider reef areas will be mined. Meanwhile, a three-year exploration program is evaluating the project’s area “A,” which is thought to have the potential to more than double production to 100,000 mt/y of copper in concentrate from 2020 onward.

Development of Konkola North adds a new commodity, copper, to ARM’s operating portfolio and represents its first operating interest outside South Africa. ARM’s interest in the mine will be housed in a new division, ARM Copper.

ZCCM Investment Holdings, owned 87.6% by the Zambian government, has a buy-in right into Konnoco Zambia of either 15% or 20%, with 5% thereof being a free carry.