EuropEan
Somincor S.A.
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Neves-Corvo is an underground mine, 100 km north of Faro, Portugal, in the western part of the Iberian Pyrite Belt. The mine has been a significant producer of copper since 1989 and in 2006 commenced treating zinc ores. European Outlook investigates a huge 164-million euro expansion plan to extend the project’s life to at least 2026. By Robert Michaels
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omincor S.A. is the wholly owned subsidiary of Lundin Mining, a mining company listed in Canada and Sweden, which operates the Neves-Corvo copperzinc mine 100 km north of Faro, Portugal, in the western part of the Iberian Pyrite Belt. It is one of Portugal’s most important exporters, a significant contributor to its economy and a major local employer. “We play a significant part,” says Trezer Manso Giant, Somincor’s Director General. Lundin Mining is a diversified base metals mining company with operations around the world, producing copper, zinc, lead and nickel.
Somincor S.A.
“Copper production for the quarter from our own operations exceeded expectations while zinc and lead approximated latest guidance”
In January, the miner announced that copper production rose 10 percent in the fourth quarter of 2011, helped partly by strong results at its Neves-Corvo mine, just 15 kilometres from Castro Verde. The company produced 27,488 t of copper in the quarter, up from the 24,908 t a year ago. Zinc production rose 15 percent to 27,053 t. “Copper production for the quarter from our own operations exceeded expectations while zinc and lead approximated latest guidance,” Lundin Chief Executive Paul Conibear said in a statement. Full-year copper production fell five percent to 75 877 t,
mainly due to production issues at Neves-Corvo earlier in 2011. The company’s zinc plant was used to process copper ore in the fourth quarter, which helped make up for lost production. “Somincor has discovered massive reserves of zinc in its Neves-Corvo mine,” Trezer Manso Giant tells European Outlook. He says there are a number of “optimization and expansion” opportunities to develop the reserves and expand the mine’s production capacity over the coming years. “The mine has been a significant producer of copper since 1989 and in 2006 commenced treating zinc ores,” he says. “A new zinc expansion 3
Somincor S.A.
About Neves-Corvo
project was completed in July 2011. The expanded plant has the flexibility to process zinc or copper ores.” Somincor is a major producer of copper and zinc. The company was launched in 1980, starting production in 1989, and during the first five years of mining, Neves-Corvo produced around 160,000 t a year of copper metal contained in concentrates, from ore grades of over 10 percent copper, making it the richest copper mine in the world. Today it is still considered to be a very rich copper mine. Neves-Corvo currently produces around 70,000 t a year of copper metal in concentrates from copper ore grades and 4,500 t a year of zinc in concentrates from zinc ores. It is considered to remain under-explored. “There is more to do,” says Trezer Manso Giant. In September 2011, Lundin Mining announced a plan to expand the mine at a cost of 164-million euros. The Lombador Phase 1 project would extend the life of the copper-and-zinc mine to at least 2026 and serve as a platform for further extensions, the company said. 4
Neves-Corvo is an underground mine, 100 km north of Faro, Portugal, in the western part of the Iberian Pyrite Belt. The mine has been a significant producer of copper since 1989 and in 2006 commenced treating zinc ores. The facilities consist of a shaft with up to 4.5 mtpa hoisting capacity for ore and waste, a copper plant with 2.5 mtpa processing capacity and a newly expanded zinc plant with 1 mtpa processing capacity. The processing of zinc-rich ores was suspended in November 2008 pending an improvement in zinc prices and the zinc facility was converted to treat copper ore. Zinc production was restarted at a limited rate in 2010 and a new zinc expansion project was completed in July 2011. The expanded plant has the flexibility to process zinc or copper ores. The mine employs both bench-and-fill and drift-and-fill stoping methods. The ore treatment is carried out by conventional crushing, flotation, grinding, thickening and filtration processes.
“The mine has been a significant producer of copper since 1989 and in 2006 commenced treating zinc ores. A new zinc expansion project was completed in July 2011. The expanded plant has the flexibility to process zinc or copper ores”
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Somincor S.A.
Neves-Corvo Optimization and Expansion Opportunities }} Neves-Corvo Copper Plant: The current higher cutoff grade production plan leaves spare capacity in the copper plant, which could be used to treat lower-grade ore, should copper prices rise above current levels. }} Neves-Corvo Zinc Plant Expansion: A further expansion of the existing zinc capacity to 2.5 Mtpa ore feed capacity (to a peak 150,000tpa zinc production averaging 112,000tpa) has been evaluated as described in the Company’s Lombador Phase One feasibility study press release of September 2011. While the SAG mill has been ordered and certain other surface critical path items are still advancing, less schedule sensitive expenditures related to the zinc plant expansion have been put on hold pending completion of the overall Neves-Corvo Underground Materials Handling Study. }} Lombador Zinc/Copper/Lead Project: The Lombador Phase One Feasibility Study has been completed. The study shows that Lombador Phase 1 can be developed as a profitable and value accretive extension to the Neves-Corvo mine. }} Neves-Corvo Future Underground Materials Handling Study: A conceptual level study identified and evaluated the underground materials handling and access options necessary to pursue the exploitation of the deeper Lombador copper/zinc resources (Phase 2) as well as the Semblana copper deposit which are adjacent to the Company’s Neves-Corvo mine. The Study indicated two preferred options: }} a new rock-hoisting and man-riding shaft approximately 1,200 m deep, located to the north-east of the existing mine surface facilities, situated between the Semblana and Lombador mineralization (the “Shaft Option”). }} Anew decline from the existing plant area equipped with a conveyer system and man and material access facilities (the “Decline Option”). The Decline Option consists of a proposed two-leg decline driven by a high speed tunnel boring machine and would be aligned to pass close to and underneath the Semblana deposit and then on to deeper parts of the Lombador resource, reaching a similar ultimate depth as the Shaft Option. Studies are advancing to refine comparisons between the Shaft and Decline Options to select a single preferred option for subsequent feasibility level study. }} Related Development Plans: In parallel to ongoing study work and to fast track the schedule for accessing the Semblana area, the Company has commenced planning and budgeting for development of an access ramp to the Semblana Deposit from the Zambujal orebody. Subject to investment approvals, the objective of the ramp development is accessing an intermediate level about 750 m below surface from which further exploration and infill drilling can be carried out. Subject to this drilling, further design and study results, this ramp will continue to approximately 950 m depth, which is the conceptual design level of a main haulage way for Semblana. This access ramp from Zambujal would be utilized with either the Shaft or Decline Options. 6
In addition to a mine deepening, the project calls for the expansion of the existing zinc plant ore processing capacity. “This study confirms the company’s view that the Lombador Phase 1 project can be developed into a successful and profitable expansion to the existing operations,” Lundin chief executive Paul Conibear said in a statement. “The initial phase of Lombador development enables zinc production to ramp up taking advantage of the expected strong zinc markets evolving over the next several years.” The facilities at Neves-Corvo consist of a shaft with up to 4.5 mtpa hoisting capacity for ore and waste, a copper plant with 2.5 mtpa processing capacity and a newly expanded zinc plant with 1 mtpa processing capacity. To learn more visit www.lundinmining.com.
Q&A with Barloworld STET European Outlook learns more about Barloworld STET, CAT’s dealer in Portugal and Cape Verde. Q: Who are Barloworld STET? Barloworld STET is the CAT dealer for Portugal and Cape Verde and we are proud to be part of a global group named Barloworld. Last year Barloworld STET celebrated the 50th anniversary as a Caterpillar dealer. Barloworld STET stands for quality, reliability and partnership and our strength is customer support. Customer needs are the major driver of our business. We constantly seek for the best solution for our customer regardless of the challenges we face. The constant challenge to find the most adequate solution is what makes the difference. We are proud to be a Caterpillar dealer. It is common to say that Barloworld STET employees have yellow blood. Q: How is Barloworld STET performing? Barloworld STET predominantly operates in Portugal and it is a known fact that our country is facing difficult and challenging times. Despite that, in 2011 we delivered better profitability than previous year. Being part of global group like Barloworld gives us a major financial advantage. Highlights for the last year relate to very important partnerships created with key accounts, both for domestic and the African markets. As it is expected for any Caterpillar dealer, we were, in 2011, the market leader in the segments we operate in. Q: Where has Barloworld STET been most successful in the last year? Barloworld STET was very successful in strategic niche markets. The success achieved in the quarry market was very important for us since this market was less affected by the construction crisis. Of course, we are also very happy with the good results achieved in mining boosted by the excellent partnership we have with Somincor. Barloworld Power Systems results were remarkable also. The results were a historical record and we are recognized as best in class dealer in this segment. Q: Customers rave about your 360º solution. Tell us more about it… 360º is a good way to describe our broad solution offering. Barloworld STET is able to offer to each customer a range of solutions that includes financing, product support, warranty, technology and product diversity. Finance is a good example of success in the 360º strategy. Over 90 percent of our equipment sales are financed through CAT Financial, one of our most important partners.
Vasco Santos
Q: Who is your ideal customer? There is no ideal customer. All customers are important for us and we need to be important for all of them. You need to listen to your customers since that’s the best way to assure you are offering what they really need. Customer satisfaction surveys are a key driver for our strategic action plans. Q: If you met a Genie who offered to have all of Barloworld STET’s dreams come true, in order of priority, what would they be? Without any order of priority I wish to have the most satisfied customers, employees, shareholders and principals. Q: What do you think is the key to Barloworld STET’s success? Our customers and employees are our most important and valuable assets. The secret to our success is the ability to manage these assets well. Q: Finally, do you have anything to add? We want to congratulate Somincor for its results, appreciate the business relationship we have and wish Somincor a long and profitable life.
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