NEWS
NEWS
First Quantum consolidation of its Kansanshi mining operations in readiness for the S3 expansion commences
In June , First Quantum Minerals Ltd . announced that it would be consolidating First Quantum Mining Operations Limited ’ s ( FQMO ) Road and Earthworks Division , Mining Division and related supporting services with operations at Kansanshi Mining Plc ( KMP ). It has been eighteen years since Kansanshi commenced production , however , ore grades have been deteriorating in recent years as higher ore grades have been depleted over the life of the mine , and annual copper production is now significantly lower than it was ten years ago .
Last year , First Quantum announced that it would be investing more than US $ 1 billion into a major new development at Kansanshi , known as the S3 project , as a result of the important reforms made to the mining fiscal regime . Although ore grades will continue to be lower than those seen historically , the S3 project will massively increase KMP ’ s mining capacity , pushing production up to former levels and beyond . The S3 project will not only boost production to former heights , but it will also extend Kansanshi ’ s life by another twenty years into the 2040s and be a catalyst for job creation in the industry .
However , lower ore grades means diminishing returns , and Kansanshi will have to mine ever increasing amounts of rock , to deliver the same amount of copper . First Quantum have therefore implemented a range of practical efficiency measures at the mine , as well as this current consolidation of operations , to ensure there is a sound basis upon which S3 can be implemented with success .
The first steps to implement the consolidation have already been taken , with key stakeholders ( including the unions ) and employees informed , and all assets – heavy machinery and equipment – transferred over . Now the main staff complement are being re-assigned . Zambian employment law does not however allow for a simple re-deployment of staff under these conditions , so there must be a technical redundancy process at FQMO , followed by the re-employment of these employees at KMP .
There are expected to some job losses as the consolidation is implemented , for example where there is a clear duplication of roles across both entities . However , this will only be applicable to a small percentage of the overall workforce , as the vast majority of FQMO employees impacted by the consolidation are being offered new roles at KMP . At this point in time , it is not possible to say exactly how many employees may be ultimately affected , as the consolidation is being implemented in phases and there will be constant review , with other employment opportunities across the First Quantum Group likely to be identified during this process . All employees being issued redundancy notices , including those that will be offered new positions , are being given separation benefits in line with company policy and the provisions of the Employment Code Act .
Commenting on this announcement , Rudi Badenhorst , Chief Operating Officer of FQM said , “ Our continued commitment to Kansanshi is demonstrated through our decision to proceed with the S3 project , and other strategic initiatives , totaling well over US $ 1 billion invested over the next 2 years . With S3 , Kansanshi has a bright future , although the ‘ easy years ’ of mining are long behind us . These new projects will test our ingenuity and technological prowess to the full . Consolidating our mining operations at Kansanshi will enable us to better support the roll-out of these projects , and therefore helps ensure their ultimate success .”
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