ASX-listed Sandfire Resources is making excellent progress on the development of its Motheo open-pit copper/silver mine in the heart of Botswana’s Kalahari Copperbelt, where the on-site workforce has recently topped the 1 000 mark.
Mining Review Africa contributor ARTHUR TASSELL recently spoke to Dale Burgess, executive country head – Botswana, to learn more about this standout US$279 million project, which will initially produce 30 000 tpa of copper and 1.2 Mozpa of silver.
Located in the Ghanzi District, about 80 km north-east of the town of Ghanzi in western Botswana, Motheo will exploit the sediment hosted T3 copper and silver deposit which was discovered in 2016. While T3 forms the backbone of the project, further resources in the area are likely to provide ore to the Motheo processing plant, starting with the nearby A4 deposit, located just 8 km to the west of T3.
Burgess, a mining engineer with over 30 years of global experience, stresses that Sandfire views Motheo as being the centre of a new long-life copper production hub in the Kalahari Copperbelt, which could see additional standalone mines being developed in the long-term.
“We see Botswana as presenting a multi-decade opportunity for Sandfire,” he says. “We have a huge landholding in the central and western portions of the Kalahari Copperbelt amounting to over 21 000 m2 in Botswana with a further 5 400 km2 in Namibia.
“While we’re active throughout our tenements, the current focus is on finding deposits within trucking distance of Motheo and we have already identified several excellent prospects – apart from A4 – which could provide satellite ore to our plant.”
Motheo entered the Sandfire stable in October 2019 when the company acquired ASX-listed junior explorer MOD Resources. With Sandfire’s Australian mines – its DeGrussa Operations in Western Australia – nearing the end of their lives, the project is crucial to Sandfire’s future, and the company has since moved with commendable speed to move Motheo into production.
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A highly positive DFS was completed in December 2020 with Sandfire simultaneously announcing that it would go ahead with construction of the project. At the same time, Lycopodium was appointed to provide engineering and procurement (EP) services for the process plant and associated non-process infrastructure.
A further milestone occurred in June 2021 when Sandfire announced the appointment of African Mining Services (AMS), a subsidiary of Perenti Global, as the open-pit mining contractor.
This was subject to the granting of a mining licence, which was awarded the following month.
The DFS on the project details a 12.5 year open-pit operation based on an ore reserve of 39.9 Mt at 0.9 % copper and 12.2 g/t silver for 360 000 t of contained copper and 15.6 Moz of contained silver. It envisaged the ore being treated in a base case 3.2 Mtpa processing plant employing conventional flotation technology.
The DFS estimated a life-of-mine (LOM) revenue of $2.45 billion and EBITDA of $987 million using a forecast long-term copper price of $3.16/lb with capex payback being achieved in 3.8 years from the start of production.
In its announcement on the DFS, Sandfire said that it was also approving an additional upfront investment of $20 million as part of the 3.2 Mtpa base case development. This was to facilitate the installation of additional processing capacity and infrastructure to allow plant capacity to be easily increased to 5.2 Mtpa to accommodate further growth of resources in the Motheo area.
“The plant will start up at 3.2 Mtpa but it is a near certainty that it will in fact transition to 5.2 Mtpa by early 2025, with copper price of $3.16/lb with capex payback being achieved in 3.8 years from the start of production.
In its announcement on the DFS, Sandfire said that it was also approving an additional upfront investment of $20 million as part of the 3.2 Mtpa base case development. This was to facilitate the installation of additional processing capacity and infrastructure to allow plant capacity to be easily increased to 5.2 Mtpa to accommodate further growth of resources in the Motheo area.
“The plant will start up at 3.2 Mtpa but it is a near certainty that it will in fact transition to 5.2 Mtpa by early 2025, with the additional ore coming from the A4 deposit,” says Burgess.
“Sandfire has already completed a PFS on A4 and its integration into the Motheo Mining Hub which produced outstanding results and we’re now following up with a DFS which is due for completion shortly.
“Accommodating the additional ore will be straightforward, with the present plant under construction having been sized for expansion. In essence, all we need is an additional 4.5 MW ball mill and, in anticipation of a positive investment decision on A4, we have already ordered this. Delivery is expected in the final quarter of 2023.”
Sandfire declared a maiden probable ore reserve for A4 in September last year of 9.7 Mt at 1.2 % copper (a much higher grade than T3) and 18 g/t silver for 114 000 t of contained copper metal and 5.7 Moz of contained silver.
The ore processing contribution of the A4 pit is five years with estimated copper production contained in concentrate of 105 000 t. According to the PFS, A4’s integration into Motheo will allow a peak production from the project of 60 000 tpa of copper in concentrate. It also delivers a 47% increase in LOM revenue to $3.6 billion.
A4 requires a capex of $71 million, inclusive of the $20 million already committed at the time of the DFS announcement in December 2020.
Updating on current activity at the Motheo site, Burgess says the project is progressing well. “The roads we require to access the site from the A3 highway are well advanced, we’ve completed a 670-bed construction camp and we’re building a 750-room mine village,” he states.
“Construction of the foundations for the crusher, reclaim tunnel and mill has started with over 1 500 m3 of concrete poured as of mid-February. On the mining side, the mining contractor has mobilised to site and machines are being assembled in preparation for the start of pre-strip operations.”
He adds that there are already over 1 000 workers on site with this figure expected to peak at 1 250.
The mining fleet to be deployed at Motheo consists of brand-new equipment purchased for the project by AMS and includes Hitachi 250 t 2600 excavators, Cat 785 dump trucks (able to carry a payload of 150 t), Cat 777 dump trucks, Cat D10 dozers and a Cat 992 wheel-loader. AMS’s contract, awarded after a competitive, three stage tender process, is the largest single contract for the Motheo project and covers a period of seven years and three months, with provision for a one year extension. It has an estimated value of $496 million. AMS has agreed to form a 70:30 joint venture with a suitable local Botswana company.
According to Burgess, the open-pit mining is an entirely conventional truck and-shovel operation. “The pit will be developed in four stages. The pre-stripping is relatively limited as the ore is encountered just below the calcrete cover at a depth of between 7 m and 10 m. We’re planning to produce the first ore in April as our intention is to build up a significant stockpile ready for commissioning of the plant in March 2023,” he explains.
Just as straightforward as the mining is the processing. The plant comprises standard components for primary crushing, grinding and classification, flotation, thickening and filtration, storage, and loadout.
All the equipment including gyratory and pebble crushers, apron feeders, the SAG mill and the associated reline machine, TankCell flotation cells, a Vertimill fine grinding mill, high-rate thickeners and a pressure filter are being supplied by Metso Outotec.
The plant is expected to have a LOM average recovery of 92.2 % on copper and 87.4 % on silver. The final concentrate grade will be 30% copper and 380 g/t silver. The plant will start up on grid power, as the Botswana Power Corporation is currently extending its network into the Kalahari Copperbelt region. A 14 km-long, 132 kV line, presently under construction, will deliver power to a substation at the mine which will be equipped with two 132 kV/11 kV stepdown transformers.
The mine’s initial power requirement will be 13 MW although this will rise to around 18 MW when the second mill is installed. Although a decision is some way off, Sandfire – which in 2016 commissioned a world-leading solar farm at its DeGrussa Operations – has said it is considering a hybrid solar system for Motheo.
Once the mine is in operation, it will have a workforce of around 650 people, many of them citizens of Botswana. “We will have a handful of expatriates employed – up to 17 – during the ramp-up phase but that figure will soon reduce, as localisation is very important to us,” says Burgess.
He adds that all employees will live in the mine village, on a two-weeks-on, one-week-off basis. “We will bus employees in at the start of their shift from wherever they are in Botswana and bus them out again at the end of shift. Given they’re on site for two weeks at a time, we’re ensuring that they will be very comfortable, and each accommodation unit includes an air conditioner, shower, and toilet.”
Commenting on Botswana as a mining jurisdiction, Burgess says that the country has been very welcoming to Sandfire. “This is my first African project and certainly I’ve been very impressed at how easy it is to work in Botswana. The infrastructure is excellent and the fact that the country has a long tradition of mining means that workers with mining skills are readily available.
“We’ve also developed a good relationship with all the government departments and we’re receiving every assistance in developing our project.”
Finally, Burgess makes the point that Motheo will provide huge benefits to Botswana. “Sandfire has calculated that over its initial mine life, Motheo will deliver LOM royalties to the Botswana government of $70 million and pay corporate income tax expected to be in excess of $200 million,” he notes.
“It is a very significant project for the country and will also, along with Cupric Canyon’s Khoemacau underground mine, which is already in production, confirm the Kalahari Copperbelt as an emerging copper-producing province and Botswana as a significant global producer of copper.”
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