C O M P A N Y
O V E R V I E W
Ramps up base metals production Written by: Tom Wadlow Produced by: James Pepper
3
LUNDIN MINING
The mid-tier producing copper, zinc and nickel specialist has just commenced production from its $715 million investment at the Eagle Mine in Michigan and is reviewing expanding zinc production at its long-life NevesCorvo mine in Portugal
Map showing worldwide operations 4
L
undin Mining is bolstering its presence across Europe and beyond with a number of promising expansions, along with exploration and mine construction projects which will see the company head towards its 500,000ton production target in the next two to three years. Such ambition is amply demonstrated by the drive to more than double zinc output at Lundin’s Neves-Corvo mine in Portugal, while a $715 million investment into a new nickel-copper mine in Michigan, USA, is now operational. The American acquisition from Rio Tinto extends the company’s reach beyond its European heartland, where mines in Portugal, Sweden and Spain are also performing well and have life ahead of them. Away from wholly-owned operations, Lundin Mining also holds a 24 percent stake in joint ventures with Freeport in a high quality coppercobalt operation in the Democratic Republic of Congo (DRC) and in a cobalt refinery in Finland, granting vertical integration into the world of cobalt mining. While current performance and growth has been steady, CEO Paul Conibear is aware that the business needs to keep exploring for the next high-grade copper discoveries and bring more assets on board. “Our metal production is around 300,000 tons this year and I would like to get us up to 500,000 tons in the next two to three years which means
MINING
“Our metal production is around 300,000 tons this year and I would like to get us up to 500,000 tons in the next two to three years” – Paul Conibear, CEO
w w w. l u n d i n m i n i n g . c o m
5
LUNDIN MINING
Neves-Corvo
‘Approximately 220 kilometres southeast of Lisbon in the Alentejo district of southern Portugal lies Neves-Corvo, Lundin Mining’s most significant European asset’
6
an additional one or two more mines,” he said. “This will lift Lundin Mining to the sort of scale we want to be at, operating five or six strong mines.” Neves-Corvo Approximately 220 kilometres southeast of Lisbon in the Alentejo district of southern Portugal lies Neves-Corvo, Lundin Mining’s most significant European asset run by its native subsidiary Somincor, and one which could have up to 30 more years of life ahead of it. Already producing 50-60,000 tons of copper and 60-65,000 tons of zinc annually from five separate ore deposits, the company is conducting a feasibility study which could see it more than double zinc output by 2017. “The study is not complete yet but we are optimistic,” Conibear added. “The global resource is more than 100 million tons of better than six percent zinc and only 1.2 million tons a year is being processed.
MINING
“There is huge potential if we can get the capital investment right. Worldwide there are very few western companies who have an asset base like this, so it is a unique opportunity for us to look at something which has been underexplored over the past decade.” The study should be completed by the end of Q1 2015, with Lundin keen to get construction underway which would involve deep bottlenecking, improving shaft capacity and doubling the zinc plant above ground. The company is also looking to expand tailings management storage and advanced water treatment facilities. Despite the upcoming focus on boosting zinc production, copper will continue to provide 50 percent or more of revenues from this asset, home to 2,000 of Lundin’s 3,000 global workforce. Into the Americas Lundin Mining’s newest Michigan asset fits perfectly into Conibear’s plan to find new deposits of the highest quality. Having acquired the nickel-copper site from Rio Tinto in July 2013 for $315 million, a further $400 million has brought the project to operational status ahead of schedule with a view to it becoming the company’s eventual biggest earner. Conibear said: “This is an extremely high-grade deposit, and nickel has taken a big step forward recently as a highly valuable commodity so we are hitting the cycle at an ideal time.
60,000 Tons of copper currently being produced from the Neves-Corvo mine
w w w. l u n d i n m i n i n g . c o m
7
Always Always maintaining maintaining the impr the innovation, innovation, construction construction and the field the of field underground of underground and with its with acknowledged its acknowledged expere performance performance of this oftype this of typw projects, projects, in theinfields the fields of prosp of
TEIXEIRA TEIXEIRA DUARTE DUARTE – ENGENHARIA – ENGENHARIA E E CONSTRUÇÕES, CONSTRUÇÕES, S.A. is S.A. is a Portuguese a Portuguese company company that that started started operating operating in in 19211921 in the infields the fields of Geotechnical of Geotechnical and and Foundation Foundation Engineering, Engineering, which which gradually gradually extended extended to other to other fieldsfields of engineering, of engineering, suchsuch as Buildings, as Buildings, Infrastructures Infrastructures , , Metalworks Metalworks , as well , as well as Underground as Underground , , Mining, Mining, Railway Railway and and Maritime Maritime works works
Mine infrastruture Mine infrastruture development development – Aguabla –
Mine infrastruture Mine infrastruture development development – Aguabla –
Water reservoir Water reservoir – Neves–Corvo NevesMine, CorvoPortugal Mine, Portugal
www.teixeiraduarte.pt www.teixeiraduarte.pt
Mine infrastruture development – Neves– C Mine infrastruture development
erint imprint of a true of a Engineering true Engineering Company, Company, with recognized with recognized expertise expertise in theindesign, the design, dnmanagement and management of major of major projects projects and developments, and developments, it hasitbeen has been operating operating in in EPOS,EPOS, S.A. S.A. which, which, ddmining and mining worksworks sincesince 1981,1981, mainly mainly through through its subsidiary its subsidiary rience, experience, still has stillthe hasmost the most advanced advanced technology technology and equipment and equipment for the for the pe works, of works, remaining remaining continuously continuously activeactive for more for more than than 30 years 30 years in major in major mining mining fpecting prospecting and survey, and survey, infrastructure infrastructure construction construction and exploration. and exploration.
www.epos.pt www.epos.pt
Equipment Equipment maintence maintence
anca Aguablanca Mine, Spain Mine, Spain
True to True its to performance its performance values, values, Teixeira Teixeira Duarte Duarte has achieved has achieved a a steady steady and sustained and sustained growth growth that has thatallowed has allowed it to build it to build a strong a strong business business capacity, capacity, detaining detaining means means and resources, and resources, namely namely human, human, whichwhich have have enabled enabled it to undergo it to undergo multiple multiple internationalization internationalization processes processes and broaden and broaden its areas its areas of of expertise. expertise. Having Having achieved achieved a turnover a turnover of more of more than EUR than 1,500 EUR 1,500 million million in 2013, in 2013, Teixeira Teixeira Duarte Duarte GroupGroup currently currently has around has around 12,500 12,500 employees employees operating operating in 16 countries, in 16 countries, in 4 continents, in 4 continents, working working in 7 different in 7 different sectors, sectors, notably notably in Construction, in Construction, anca Aguablanca Mine, Spain Mine, Spain Concessions Concessions and Services, and Services, Real Estate, Real Estate, HotelHotel Services, Services, Distribution, Distribution, Energy Energy and Automotive and Automotive Industry. Industry. Teixeira Teixeira Duarte Duarte has been has been listedlisted on theonstock the stock exchange exchange market market since since 1998,1998, but itbut maintains it maintains a stable a stable shareholder shareholder structure, structure, mostly mostly dominated dominated by thebyTeixeira the Teixeira Duarte Duarte family, family, which, which, alongalong with its with history its history and the andoperational the operational capacity capacity of its of teams its teams and and resources, resources, gives gives it theitconfidence the confidence and responsibility and responsibility to be to able beto able to continue continue to fulfill to fulfill its mission: its mission:
Execute, Execute, contributing contributing towards towards the construction the construction of a better of a better worldworld . .
Corvo NevesMine, CorvoPortugal Mine, Portugal
SUPPLIER PROFILE
EPOS
Established: Early 1980’s Industry: Construction Services: EPOS - Empresa Portuguesa de Obras Subterrâneas, S.A. is a leading Portuguese company for large underground construction contracts of all types, holding an extensive experience in this type of work. Founded in 1986, the company quickly affirmed itself as the specialised contractor in its field. More than 20 years on, EPOS is today recognised in the market for the high technology of its production facilities, both human and equipment, that are clearly reflected in the high standard of its outstanding works. EPOS is confident in the future, emphasised by the ever increasing demands of the different works it has been awarded. EPOS faces its challenges, strengthened by this confidence, as it reaffirms its leadership and ongoing commitment on quality, safety, its team, cutting edge technology, respect for the environment as well as social responsibilities and the continuous improvement in profitability that guarantees the satisfaction of customers, shareholders and investors. Management: President - Dr. José Pedro Poiares Cobra Ferreira Website: www.epos.pt
LUNDIN MINING
MINING
“Currently the life is eight years and there is a satellite deposit we are drilling now to see if we can expand the life beyond this. There are not many new mines being built these days so we are very pleased with how this has developed.” The CEO said that Lundin should be able to produce at around $2 per pound of nickel, and with prices currently sitting at roughly $8, the margins are extremely encouraging, especially given annual production is expected to reach respective amounts of 23,000 and 20,000 tons of nickel and copper. The 300 metre long, 85 metre wide and 340 metre deep high grade deposit will also produce some cobalt, platinum, palladium and gold byproducts. Just recently announced is Lundin Mining’s acquisition from Freeport of an 80 percent stake in the renowned Candelaria copper/gold mine in Chile. This $1.8 billion acquisition vaults Lundin up into the top 20 copper producers, more than doubling 2015 copper production. Lundin is pursuing upside opportunities at Candelaria with an aggressive exploration programme to extend the life of the large open pit and three existing underground mines that make up the Candelaria Mine Complex.
‘Just recently announced is Lundin Mining’s acquisition from Freeport of an 80 percent stake in the renowned Candelaria copper/ gold mine in Chile’
Closer to home Back in Sweden, Lundin Mining is celebrating its 10th anniversary of operating the Zinkgruvan zinc and copper mine, which has at least another w w w. l u n d i n m i n i n g . c o m
11
The company
JosĂŠ Dias Faustino, S.A. works
as an earthmoving contractor for Somincor, S.A., performing underground and surface services at the Neves Corvo mines.
Tel: 00351 286 683 268 F: 00351 286 683 051 E: jdf@grupojdf.pt Mina Neves Corvo 7780 -409 Santa Barbara de Padroes
LUNDIN MINING
MINING
decade of life to run. This was the company’s first major asset following the Lundin Family’s discovery of its first mine at Storliden, in northern Sweden. The business started out as a junior explorer in the 1990s before making this high-grade zinc and copper breakthrough in 1999, which went into production in 2002 and provided essential capital for acquisition of additional mines. At Zinkgruvan, in the central-south region of the country, Lundin Mining has managed to ramp up extraction of ore from 700,000 annual tons to 1.2 million, with Conibear looking to gain another five to 10 percent by maximising current capabilities. “Each year we have been successful in discovering more than we’ve milled,” Conibear added. “And as well as producing 75-80,000 tons
Operations in Zinkgruvan mine
w w w. l u n d i n m i n i n g . c o m
13
Checking References? Ours go back more than
125 years
Heavy Industrial General Contractors Specialists in Mining Construction and Maintenance Design/Build • Boilermaking • Concrete • Demolition Ironworking • Millwrighting • Piping • Offices Nationwide With gratitude to Lundin Mining for the opportunity to help build the new Eagle Mine and reinvigorate the historic Humboldt Mill in Michigan’s Upper Peninsula. CR Meyer is proud to be a part of the region’s rich mining history.
crmeyer.com 800.236.6650
LUNDIN MINING
MINING
of very clean zinc, the 30-35,000 tons of lead and 3-4,000 tons of copper by-products makes this mine very cost effective.” Elsewhere in Europe, Lundin is looking to shift production from seven years of open pit to underground extraction of better-quality nickel and copper at Aguablanca in southern Spain. This will commence at the turn of the year for an initial life of three years with the option to go deeper. Lundin Mining also holds a 24 percent interest in a joint venture with Freeport at Finland’s Kokkola cobalt mine. A similar stake of a Freeport partnership at Tenke Fungurume in the DRC, one of the world’s largest known copper-cobalt resources, has also been established and it delivered $140 million to Lundin in cash flow last year.
SUPPLIER PROFILE
“As well as producing 7580,000 tons of very clean zinc, the 30-35,000 tons of lead and 3-4,000 tons of copper byproducts makes this mine very cost effective” – Paul Conibear
CR MEYER
CR Meyer is a heavy industrial general contractor with deep roots in the mining industry. More than 70 years ago they began constructing heavy industrial facilities at iron ore mines in Michigan’s Upper Peninsula. The company has since expanded across the United States to include mines that extract rare earth minerals, metals, and materials for the petrochemical industry. CR Meyer’s professional services division includes project managers, engineers, architects, and schedulers who develop solutions to control costs, maximize productivity, and complete projects safely. Website: www.crmeyer.com
w w w. l u n d i n m i n i n g . c o m
15
LUNDIN MINING
Eagle Mine
‘Eagle Mine is also home to pioneering techniques. “Water treatment is an area which the company is stepping up its activity” – Paul Conibear
16
Advancing techniques As well as developing its portfolio of high-grade assets, Lundin Mining is also eager to make the most out of both tried and tested and new innovations to help see it reach future production targets. The company is trialling two enormous 60-ton Atlas Copco underground haul trucks at NevesCorvo, where advanced dewatering of tailings is also being put into practice alongside smart technologies to help give enhanced visibility of important mining processes. Eagle Mine is also home to pioneering techniques. Conibear added: “Water treatment
MINING
is an area which the company is stepping up its activity. At Eagle Mine we have two state-ofthe-art water treatment plants which I have not even seen in the base metals industry before. These have reverse osmosis capabilities and cost around $60 million. “Over in Sweden heat recovery has become a priority and something which has helped us conserve energy – we are looking into deploying this in other locations too.� Responsible In all areas of operations Lundin Mining is committed to working responsibly and to the
60 million
Value in dollars of two state-ofthe-art water treatment plants
w w w. l u n d i n m i n i n g . c o m
17
LUNDIN MINING
MINING
benefit of the localities in which it is based. The company’s corporate goals include ‘development of a high performance, motivated culture, achieving a safe, productive and healthy work environment, and to conduct business activities ethically and transparently’. Each year Lundin Mining publishes a detailed Sustainability Report, outlining achievements and areas for improvement in sectors from environment and corporate governance to social and health and safety. During 2013, overall safety record for the year included a Total Recordable Incident Frequency (TRIF) of 2.01, which represented an improvement of 20 percent over the prior year TRIF of 2.50. The target for 2014 is 1.8.
Aguablanca, HSE rescue team
Key Personnel
Paul Conibear CEO Mr. Conibear has more than 30 years’ experience in corporate and asset management of all phases of mining investments in North and South America, and several African countries including the Democratic Republic of Congo. Originally from the mining centre of Sudbury, he brings a practical background of 18 years in mining project and construction management followed by 12 years as a corporate officer and director for several successful public companies including Tenke Mining Corp.
w w w. l u n d i n m i n i n g . c o m
19
ECOFAB RAILCAR COVERS Covering the World's Bulk Materials Proven record of reliability and safety Quick on and off application Provides 100% dry containment Superior performance with low overall cost
For more information about the Ecofab Railcar Cover System
info@ecofab.com | www.ecofab.com PROUD TO SUPPLY LUNDIN MINING
www.igan-consultores.com
STANDARD COVER
LUNDIN MINING
MINING
The company has a strong reputation as being a good corporate citizen, underlined by its support of social programmes including the Zinc Saves Kids initiative. Zinc Saves Kids is a scheme designed to improve the survival, growth, and development of undernourished children by funding UNICEF’s zinc supplementation and treatment programmes. This was one of many schemes funded by Lundin Mining, with overall company spend on social programmes exceeding $9 million for 2013.
The Zinc Saves Kids initiative makes a difference on the ground in Peru and Nepal
w w w. l u n d i n m i n i n g . c o m
21
We custom design the lubricant that your machine needs If no two machines are alike, no two lubricants should be alike either. Because of this, at Repsol we make a customized lubricant for your machinery, based on its needs, and always in accordance with the strictest of international standards and the certifications of the most important manufacturers.
Subsidence, Stability, Seismicity, Water, Safety Sydney Tel +61 412 135 782
www.beckengineering.com.au Melbourne Tel +61 488 440 964
Berlin Tel +4930 8507 3699
LUNDIN MINING
MINING
As of January 2013, 0.1 percent of company revenues are being channelled into the Lundin Foundation. Conibear explained in the Sustainability Report 2013: “In addition to the provision of traditional community investment programs in the areas of health, education and community infrastructure, the Lundin Foundation provides seed grants, technical assistance and risk capital to highpotential small and medium-sized businesses and social enterprises with a view to generating wealth and employment needed to alleviate poverty on a sustained basis.�
Working together
Lundin Mining is committed to protecting the environment w w w. l u n d i n m i n i n g . c o m
23
LUNDIN MINING Such ongoing work will only continue to strengthen the company’s reputation as a sustainable miner, something which the CEO is determined to preserve and enhance moving forward.
Zinkgruvan, rescue simulation training
Looking forward As well as helping to improve the lives of others, Lundin Mining also invests heavily into developing its own base of employees and prospective workers. This often involves offering work to locally-based people, providing an instant economic boost to the areas operated in. Equally as important as adopting the latest
Enlighten your world.
Visit us online
M.J. VanDamme, Inc. is a
construction firm involved in mining support, farming, and civil construction. www.mjvandammeinc.com
Illuminating solutions for day or night. www.provincelighting.com
MINING GLOBAL
‘As well as helping to improve the lives of others, Lundin Mining also invests heavily into developing its own base of employees and prospective workers’
Itaque consed quam aspero et modite
w w w. l u n d i n m i n i n g . c o m
25
Uncovering new highgrade deposits is also key to future growth
“..the group has a great exploration record over the past 15 years but Mother Nature is tough – it takes time” – Paul Conibear
26
proven mining techniques and training existing workers is nurturing the mining engineers and directors of tomorrow, something which the company’s successful graduate scheme is actively pursuing. “We hire a lot of young people; last summer we had 58 students and when they come on board we cycle them through our mines to gain on the job training,” Conibear said. “It has been extremely successful, as every new grad has been deployed and we don’t get them back as they really demonstrate their value to the operations. “Quite a lot of our graduate hiring comes from Portuguese and Swedish universities and we will attract American and Canadian students with the Eagle Mine. We are based in some outstanding locations for young people to start their working
LUNDIN MINING
MINING
Company Information INDUSTRY
Mining HEADQUARTERS
Toronto, Canada FOUNDED
1994 EMPLOYEES
3,000
careers.” Uncovering new high-grade deposits is also key to future growth, with Lundin Mining spending $35-50 million a year on exploration, primarily in pursuit of copper. Around half of this is spent around the company’s existing sites with the rest being invested in the likes of Peru, Chile, Turkey and Romania. The outcomes of these works could be pivotal to Conibear’s ambitions. He concluded: “Being growth oriented brings its challenges, the greatest of which being to find quality investment targets. There are plenty of affordable exploration projects but the grades are hard to find. “That said the group has a great exploration record over the past 15 years but Mother Nature is tough – it takes time.”
REVENUE
$727.8 million (2013) PRODUCTS/ SERVICES
Copper, zinc and nickel specialist
w w w. l u n d i n m i n i n g . c o m
27
150 King Street West, Suite 1500, P.O Box 38 Tel. 1 416 342 5560 Fax. 1 416 348 0303 info@lundinmining.com www.lundinmining.com