Africa-Press – Botswana. Sandfire Resources, the operator of Motheo copper mine, has awarded a $235 million mining services contract to Perenti’s subsidiary African Mining Services (AMS) at the A4 open pit within the larger Motheo copper mine in Ghanzi, Botswana.
With a term of 6 years, the contract will see AMS provide all the surface mining services tied to the development, as well as production activities at the open pit. The A4 pit is located 8km from Sandfire’s existing Motheo mine, which AMS has already developed, and which is progressing towards production. In 2021, AMS was awarded the $496 million contract for the mine, also known as T3 open pit, with an initial term of seven years.
“We are excited about the opportunity to expand our partnership with Sandfire Resources. Motheo is a long-life asset in the Kalahari Copper belt, and the expansion of our role here is in keeping with our strategy of disciplined growth within top-tier mining jurisdictions with high-quality partners,” said Perenti managing director and chief executive officer Mark Norwell
“Sandfire is now one of our largest clients and over the term of the combined contracts, the T3 and A4 open pits are expected to generate total revenue of over $703 million, delivering strong returns for Perenti and its shareholders.”
Earlier this year in May, Sandfire announced the successful production of its first copper concentrate, paving way for the company to ramp up production, with an initial 3.2 million tonnes per annum (Mtpa) processing capacity. The first shipment is scheduled for the third quarter of the year.
Sandfire also announced the Environmental and Social Impact Assessment (ESIA) for the A4 pit mining project was approved by the Botswana government’s Department of Environmental Affairs (DEA). The approval follows the company’s extensive public consultation process that included multiple stakeholders, including related communities.
The company said the ESIA paves the way for the grant of the mining license for the A4 pit as the last critical path item for the Motheo 5.2Mtpa Expansion, which will see contained copper production rates at Motheo increase to around 50,000 tpa during 2025.
The total development capital for the expansion project is estimated to be $397 million and this includes development costs for the A4 mine infrastructure, and the 5.2Mtpa plant expansion of $47.9 million.
Sandfire is funding the development of the Motheo Copper Mine through a combination of cash and project debt. A $140 million Project Finance Facility has been executed with Société Générale and Nedbank. The Facility is based on the initial 3.2Mtpa development, with the integration of the 5.2Mtpa Motheo scheduled to follow after the granting of the A4 mining license. The first two tranches totaling $110 million have been received, with the balance drawn in the first quarter of 2023.
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