JOHANNESBURG (miningweekly.com) – A contract to establish and mine the Gamsberg opencast zinc operation has been awarded to Aveng Moolmans by Black Mountain Mining, a Vedanta Zinc International operation.

Vedanta acquired zinc assets, including Gamsberg, from Anglo American in 2010 for $1 338-million.

The contract award to Aveng Moolmans involves the setting up and commissioning of a concentrator plant and associated infrastructure for the opencast mine, which is located on one of the world’s largest undeveloped zinc deposits, 20 km east of the town of Aggeneys, in South Africa’s Northern Cape.

Vedanta Zinc International CEO Deshnee Naidoo describes Gamsberg as a key replacement and growth project for the company, which also owns the Skorpion Zinc mine and refinery in neighbouring Namibia.

A total of 50-million bank cubic metres of waste and ore will be mined over the initial 44-month contract period at Gamsberg, which has a 13-year life-of-mine from first ore in 2018.

The $400-million, first-phase capital expenditure will fund a four-million-tonne-a-year opencast mine and a plant capable of producing 250 000 t/y of zinc metal-in-concentrate.

At current zinc prices, which are considerably higher than the project’s hurdle rate, the first phase should pay for itself in less than three years.

The manganese content of Gamsberg’s zinc ore will be removed at Skorpion.

Once Phase 1 is developed, manganese challenges are fully understood and cash flow is generated, full consideration will be given to investing in a refinery.

The award to Aveng Moolmans, a subsidiary of Aveng Mining headed by MD Stuart White, follows the appointment of ELB’s Engineering Services subsidiary to provide engineering and procurement services, as well as oversee the construction of the process, power and water plants.

The company’s Black Mountain Mine employs 1 500 people and the Gamsberg project will employ another 850 to 900 people when operational.

More than 1 000 people are expected to be employed during first-phase construction.

Naidoo is confident that zinc price fundamentals will be there over the next three to four years, when key decisions need to be made on the next growth steps.

Meanwhile, she anticipates that Gamsberg will be one of the first new greenfield zinc projects to market at a time of structural zinc undersupply.