OPERATIONS
mining method, and at the same time, updated its Life of Mine
profile to 14 years. According to its latest technical report,
released in February 2020, the new mining plan will allow Bisie
to produce more than 11 500 tonnes of tin annually, placing it
in the top ten mines globally. The new plan allows for higher
mined head grades, less waste, and improved cashflows.
The new method uses open stoping with hydraulic backfill
(OSHB) and will result in less dilution of the mined tin. OSHB,
however, requires more pillar support than sub-level caving, the
previous mining method.
Alphamin further announced that a drilling campaign at the
mine’s greenfield prospect, Mpama South, will get underway
soon. Mpama South, part of the Bisie complex, is just 1.5km
from the current underground mine. The company also plans to
begin underground exploration drilling at Mpama North during
2021 to extend the current tin resource.
Challenges for exploration
To advance a mining project from early stage exploration to full
production is the exception rather than the rule. Most junior mining
companies hope to prove up a large reserve and then offload the
project to a major with the necessary capital to back up further
development. There are scant examples of junior mining companies
making a great discovery and then building a mine from scratch,
especially in Africa. Alphamin is one of only a handful of companies
that has done so successfully and the first foreign-owned mining
company to ever do it in the North Kivu Province of the DRC.
Financial institutions are risk averse and getting funded for a
greenfield project, especially in high-risk jurisdictions, is near
impossible. Once a company has managed to raise the necessary
funds, nonetheless, it needs to prove, beyond reasonable doubt,
that the projects are viable. Even then, the ore body remains a
big unknown and it takes several years before the mine can start
shipping out product, pay off all its debt and become profitable.
During development, the company naturally burns through its
cash reserves and starts accumulating debt, often raising more
funds to cover its operational costs and in the process diluting
its shareholders. Investors are aware of these risks. Alphamin’s
management and impressive list of shareholders, however,
are also well aware of the great rewards should they pull it off
in the DRC. Bisie is on the cusp of churning out high grade
tin uninterruptedly for at least the next few years, with a high
probability of adding more tonnages as exploration continues.
Remarkable feat
What the Alphamin team has achieved until now, is nothing
short of astounding. They hacked and built a solid road through
the impenetrable rainforest of the Congo Basin, dealt with
the artisanal and security concerns, and constructed a mine
that produces, and exports, the highest-grade tin in the world.
When Alphamin started construction at Bisie, there was no
access to site and the company had to build a road from scratch
with very basic equipment, using local labour. Before the road
was completed, equipment and workers were flown in with
helicopters from Goma, which made it a costly exercise.
Punters predict that Africa will be the next growth region for
tin, with Bisie paving the way for new investment into the DRC
and on the continent. Africa used to be a major source of tin
concentrate in the past with production peaking in the 1970s,
but conflict in countries like the DRC prevented the products
from being exported. Bisie has brought stability and peace in a
fragile region of the DRC and the operation has huge significance
for the country and the province of North Kivu. Bisie is proof that
the DRC government can support the mining sector in a volatile
part of the country characterised by weak governance and a lot
of conflict since the 1994 genocide in neighbouring Rwanda, and
even before that. The project has the potential to stabilise and
reinforce peace and to promote development.
Growth in demand predicted
Most market analysts expect limited growth on the demand side
for tin in 2020, while, for supply, the focus will be on production
cuts and whether these will be adhered to by producers.
However, even if world producers give credence to calls for a
drastic cut in production, idle capacity can turn back on quickly,
and bring the material to market in short order.
The ITA forecasts a return to growth for tin demand, with supply
rebounding to achieve the narrowest market balance seen in
seven years.
Dr Jeremy Pearce from the ITA believes tin will see an explosion
of new uses as the world transitions into the Fourth Industrial
Revolution and embraces climate change solutions. He
highlights the three main reasons to be optimistic for future tin
use: the end of miniaturisation, electronics growth as a result
of the Fourth Industrial Revolution, and climate change. He
predicts that the combination of all three would see tin demand
increase rapidly in the 2030-2050 timescale.
Bisie will be in business at least until the mid-2030s, which
makes a long-term bet on Alphamin, Bisie and the DRC not as
ludicrous as some would have thought only a few years ago. The
mine is definitely one to keep an eye on in 2020.
The entrance to Alphamin’s Bisie tin mine in the DRC.
www. africanmining.co.za
African Mining Publication
African Mining
African Mining April 2020
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