May 13, 2020 / 10:34 AM / 14 days ago

Zambia, in diversification push, starts processing artisanal gold

LUSAKA, May 13 (Reuters) - Zambia has built 10 milling plants to process gold in a drive to formalise artisanal and small-scale miners and diversify from copper mining, state mining investment company ZCCM-IH said on Wednesday.

The project is being undertaken by Consolidated Gold Company Ltd (CGCZ), a gold processing and trading joint venture between Karma Mining Services and Rural Development and ZCCM-IH.

Zambia’s efforts are part of a continent-wide push to tackle informal mining of gold, which is driven by poverty and unemployment, poses health and environmental risks and deprives states of revenue when the metal is smuggled across borders.

Africa’s second-largest copper producer, Zambia aims to produce 40,000 kg of gold in 2020 from primary and secondary sources including gold bought from artisanal and small-scale miners at government-controlled buying centres.

The milling plants have a combined processing capacity of 30 tonnes of ore per day and a targeted average of 7.5 kilograms gold production per month, ZCCM-IH said.

A gold leaching plant with a processing capacity of 8,000 tonnes of ore material per leach, and a targeted gold production of 17.5 kilograms per month will be completed by June, it said.

“The plant is aimed at chemically processing the gold stock piles from two old gold mines, and concentrates from the gold milling plants,” the statement said.

The project aims to reach gold production of 25 kg per month from the milling and leaching plants by the end of 2020, ZCCM-IH said.

In March, ZCCM-IH started buying gold from artisanal and small-scale miners whose ranks have swelled worldwide as gold prices soar.

ZCCM-IH is now buying gold for at least 600 kwacha ($33.33) per gram, with prices increasing according to purity - a competitive option compared to prices of around 500 kwacha in the open market, a spokeswoman said.

The ZCCM-IH price still represents a significant discount to the price of gold on the world market, which has ranged between around $58 and $61 a gram over the past month.

Disruptions to supply chains due to the COVID-19 pandemic have depressed local gold prices, hurting subsistence miners all over the world.

As the state seeks to benefit more from large-scale mining too, Zambia in December said it plans to make copper mining companies account for the gold they produce as a by-product of the copper mining process.

First Quantum Minerals’ Kansanshi Mine, the only mine that has been declaring its gold production, produced 4,200 kg of gold in 2018. ($1 = 18.0000 Zambian kwachas) (Reporting by Chris Mfula; Editing by Helen Reid and William Maclean)

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