LUSAKA, May 20 (Reuters) – Zambia’s state mining investment company ZCCM Investments Holdings (ZCCM-IH) has entered into a joint venture with mining services firm Array Metals to process production from a gold deposit, the company said in a statement on Wednesday.
Africa’s second-largest copper producer, Zambia is trying to diversify its revenue base, and aims to produce 40,000 kg of gold in 2020 from primary and secondary sources including gold bought from small-scale miners.
ZCCM-IH subsidiary Consolidated Gold Company Zambia (CGCZ) will hold 65% of the project processing gold in Mumbwa, west of Lusaka, with Array Metals Zambia holding 35%.
The project aims to produce about 3 tonnes of gold within the next two years, worth approximately $150 million at current prices, the statement said.
Array Metals estimated the reserve at about 3 million tonnes of gold ore material containing between 2.5 and 3.5 grams of gold per tonne, Vice-President Chris Rugari said.
The overall targeted gold production is 7,500 kg from the resource, but under the agreement only part of the deposit would be processed before ramping up production, Rugari said.
Rugari said Array Metals hoped to contribute to the development of Mumbwa, traditionally known for agriculture, through economic diversification and job creation.
Zambia has also built 10 milling plants to process gold in a drive to formalise artisanal and small-scale miners and diversify from copper mining, ZCCM-IH said last week.
As part of the push to monetise gold resources, the government is also trying to make copper mines account for the gold they produce as a by-product of the mining process.
First Quantum Minerals’ Kansanshi Mine, the only copper mine that has declared its gold production, produced 4,200 kg of gold in 2018. (Reporting by Chris Mfula; Editing by Helen Reid and Mark Potter)