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Konkola Copper Mines plc
November 2012
1
Disclaimer
The views expressed here may contain information derived from public and non-publicly available sources that have not been
independently verified.
No representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of this information. Any
forward looking information in this presentation including, without limitation, any tables, charts and/or graphs, has been prepared
on the basis of a number of assumptions which may prove to be incorrect. This presentation should not be relied upon as a
recommendation or forecast by Konkola Copper Mines plc (“Konkola"). Past performance of Konkola cannot be relied upon as a
guide to future performance.
This presentation contains 'forward-looking statements' – that is, statements related to future, not past, events. In this
context, forward-looking statements often address our expected future business and financial performance, and often contain
words such as 'expects,' 'anticipates,' 'intends,' 'plans,' 'believes,' 'seeks,' or 'will.' Forward–looking statements by their nature
address matters that are, to different degrees, uncertain. For us, uncertainties arise from the behaviour of financial and metals
markets including the London Metal Exchange, fluctuations in interest and or exchange rates and metal prices; from future
integration of acquired businesses; and from numerous other matters of national, regional and global scale, including those of a
environmental, climatic, natural, political, economic, business, competitive or regulatory nature. These uncertainties may cause
our actual future results to be materially different that those expressed in our forward looking statements. We do not undertake to
update our forward-looking statements.
This presentation is not intended, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to
purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities in Konkola or any of its partner group
company undertakings or any other invitation or inducement to engage in investment activities.
2
Konkola Copper Mines – A Leading Copper Company…
 688.9 Mt of copper reserves & resources, 13.6 Mt of contained Cu
 Konkola underground mine grade of 3.55% with 24+ years mine life
 New 300+ktpa Nchanga smelter; New East and West Mill concentrators; Second
Cobalt Recovery Furnace
 Konkola Deep Mining Project (“KDMP”) mid-shaft loading commissioned in April
2010 and waste hoisting from bottom-shaft commissioned in October 2012
 Growth in copper production from 200 kt production in FY2012, targeting production
of 400+ ktpa through brownfield expansion
 Further cost reduction and stabilisation: targeting sustainable cost performance of
<$1.50/lb C1 integrated cash costs
 The largest private employer in Zambia in terms of the number of employees and
third-party contractors
 Zambian Government remains an important shareholder of KCM
 Committed to training and developing the local workforce
 Local communities: Numerous health, education and welfare programmes
Substantial high grade
resources and reserves
Well invested
production facilities
Valued local partner
Substantial production
growth and cost
reduction
Strong working
relationship with
Zambian government
3
Nampundwe
 Underground pyrite mine
 Concentrator
Overview of KCM Assets
Zambia
...in the Heart of the Zambian Copper Belt
Nkana (Kitwe)
 Refinery
 Smelter (incl. acid plant)
Zambia
KCM Group
operations
Other operators
Lusaka
Tenke
Kamoto JV
Frontier
Kansanshi
Lumwana
Chambishi
Ndola
Kabwe
Main Highway Routes in
Zambia
Kitwe
Konkola (Chililabombwe)
 Underground mine with 3 shafts (KDMP)
 New Concentrator
 Old Concentrator
 Backfill Plant
Nchanga (Chingola)
 Underground mine with 2 shafts
 Open pit mines (2 operational)
 2 new concentrators (East and West mills)
 2 old concentrators
 Tailings leach plant (incl. SX-EW facilities)
 Smelter with acid plant
 Acid plant
 Refractory ore stockpiles (CRO)
$2.6bn of capital invested to-date, in a stable regulatory and democratic environment
Nchanga Open Pits
Konkola Deeps
Copper R&R by Asset
Konkola
82%
TotalCopperReserves&
Resources: 13.6Mt
Konkola UG
Nchanga UG
Nchanga – OP
Tailings Dam
Refractory Ore
4
Integrated, Well Invested Asset Base
Mines Concentrators Smelter Refinery Products
Nchanga
(open pits)
Nchanga Nchanga
Nkana
Refinery
Copper
Cathode
Nchanga
(underground)
Nchanga
Tailings Leach
Plant
Konkola
(underground)
Konkola
Tailings
Stockpile
Purchased
Concentrate
Nampundwe
(underground
pyrite mine and
concentrator)
Old Konkola
Concentrator
Nkana
Smelter
Cobalt
Slime
Acid
Under care & maintenance/restricted use
By-products
Refractory Ore
(CRO)
Refractory Ore
(CRO)
Fully integrated operations in mining, concentrating, smelting and refining
55
Investment Cornerstones
 Caters to enhanced mining out put
 Improved recovery and concentrate grade
10.5 mtpa
processing
capacity
Both
commissioned in
2012
New East &
West Nchanga
Concentrators
Project Description Capacity Status
New Nchanga
Smelter
 State-of-the-art technology
 Benchmark Sulphur Capture
311+ ktpa
Commissioned in
2008
2
Konkola Deep
Mining Project
 Enhanced mining up to 1,500 M depth
 Mine life extension to 30 years
7.5 mtpa at
3%+ Cu
Bottom Shaft
waste hoisting
commissioned in
2012
3
New Konkola
Concentrator
 Caters to enhanced mining out put
 Improved recovery
 Improved Concentrate grade
6 mtpa processing
capacity
Commissioned in
2007
1
Tailings Leach
Plant Expansion
 Increase capacity at current facility from
42ktpd to 47ktpd & finally 55ktpd
75 Ktpa
Commissioned in
2012
4
Chingola
Refractory Ore
Project
50 Ktpa Under review
 Harnesses 150mt Refractory ore stock
pile
 Uses entire acid from Nchanga Smelter
8
5
Second Cobalt
Recovery furnace
 Increase cobalt recovery from 37% to
70%
1,350-1,400t
of cobalt
Commissioned in
2012
6
Upper Ore Body
Project
 Increase Nchanga Under Ground life by
22 years
Sustain NUG at
2.5 Mtpa
Project
development
underway
7
5
6
Investments - The New Nchanga Smelter
7
Investments – Konkola Deep Mining Project
68
83
34
27
H1 FY12 H1 FY13
-22%
102
110 8%
Increase %
-22%
FY2013 Interim Update
Finished Production (ktpa)
 Shaft 4 equipping complete
 Waste hoisting from bottom shaft has commenced
 High speed tramming at 2900 ft level complete
 Dewatering secure with power backup generation
 Primary development has picked up pace with induction
of new partners
 Concentrator already commissioned
Konkola
 New East Mill concentrator fully stabilized
 New West Mill concentrator fully commissioned and
flotation circuit fully stabilized
 Second CRF commissioned and cobalt recovery has
increased
 UOB development on track
Nchanga
 Induction of diverse new talent
 Formation of Growth/strategic planning cell to drive key
growth initiatives
 Increased deployment of technology and TQM
methodology across the organization
Organisational Initiatives
Integrated
Custom
8
 Safety, Health, Environment and Quality policies regularly monitored and reviewed
– Significantly reduced LTIs between 2000 – 2011
 Received internationally recognised occupational health and safety certification:
– International Golden Peacock Award for occupational health and safety
– British Safety Council Award in April 2009 and April 2010
– Zambia Federation of Employer’s award for best safety and occupational health policy in 2009
KCM Lost Time Injury (“LTI”) Track Record1
Source: Company
(1) Full year data for the calendar year ending December.
Focus on Safety
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
0
50
100
150
200
250
300
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
LTIFR/LTISR
LTIEvents
LTI Events LTISR 2Khrs LTIFR 200Khrs
9
Environmental Stewardship
 KCM seeks out and invests in new technologies and operational
improvements to prevent or minimise the negative impact of its
operations on the biophysical and social environment
– KCM’s new smelter complex in Nchanga achieve sulphur
recovery factor exceeding 97.5% and eliminates >99% of
sulphur emissions
 Governed by principles of sustainable development
– Achievement of the British Standards Institution’s International
Standards Organisations (“ISO”) 14001 certification for Konkola
and Nampundwe mines
– Investments in programmes to promote reforestation and better
agricultural practices. Current project include an initiative to
reduce indigenous timber consumption through use of plantation
timber
 At Konkola operations, significant success has been achieved in
bringing down total suspended solids (TSS) in discharged water
from an yearly average of 200mg/L in 2009 to below 70mg/L in
2012.
– Current performance is well within statutory limits
– Lower TSS has improved pump and power efficiencies
20112010 2012
600
200
0
400
200920082007
Konkola TSS mg/L
10
 Zambia’s biggest private supporter of sport
– Sponsor of 2011 and 2012 Zambia Open golf championships
– National soccer league (KCM-FAZ league) from 2005-2010
– Four KCM national football clubs
– Sports infrastructure support
– District school football tournaments
11
Community Welfare: Education, Sports and Recreation
Education
 Runs two trust schools – provide primary and secondary education to over 1,800 children of
mine employees and related communities
 Provide computer equipment and computer laboratories in government high schools in local
communities
 Provide training for teachers in IT skills
 Committed to provide several years of computer maintenance support to schools
 Maintains scholarship programmes
– Scholastic Excellence Award to top performers
 Constructed early childhood care and development centres in Chililabombwe and Chingola
for Marketeers’ children
Sports and Recreation
12
Local Economic Development and Healthcare Initiatives
 Sustainable Livelihood Programmes:
– Promote income generation among
vulnerable groups
– Cattle distribution to women
 Goat rearing for small-scale farmers
 Widows Tailoring Project
– Supported the development of two widows
tailoring and designing co-operatives
– Industrial garments were made by women
to sell to KCM
– Supported small-scale agricultural activities
Local Economic Development Healthcare Initiatives
 Child-aid partnership with DAPP (NGO)
– Improve living conditions for up to 15,000 households in Chingola
and Nampundwe
 Infrastructure Support projects
– Sinking 2 boreholes for rural communities in Chingola to provide
potable water
– Development of water and sanitation facilities at Nyimba’s Kenneth
Kaunda Children of Africa Foundation
– Spent over $5m on road and street lighting repairs
 KCM runs 2 hospitals - the Nchanga South
Hospital and Konkola Mines Hospital
– Rank among the best in the Southern
African region
– Run by highly-qualified and experienced
consultants covering medicine, surgery,
paediatrics, urology, orthopaedics, obstetrics,
gynaecology and anaesthesia
 KCM also runs 5 satellite clinics around its
operational areas
– The “Rollback” Malaria Control
Programme started in 2000 has been
recognised as one of the most successful
malaria eradication initiatives
– Successfully reduced the prevalence of the
disease in and around its operations by
over 80%
– No malaria death recorded at any of the
KCM Group’s health facilities since 2002
 2012: Launched a major eye-care initiative to screen and treat members of
society for diabetes-related eye conditions in and around the areas of KCM
operations
 2009/10: The “Moneni2” Project
– Distribution of 23,000 pairs of eye glasses to school-going children and
adults of over 40 years of age suffering from short or long-sightedness
 2008: The “Moneni” Eye Cataract Project
– Helped to restore the sight to 171 elderly people during a campaign in which
over 3,000 people were screened and treated free-of-charge for various eye
conditions
 2007: Door-to-door family health check programme
– Provide basic health information, counselling
& general health checks to mitigate impacts
of HIV/AIDS
 2006: Provided artificial limbs to people in Zambia
Summary
A Leading Zambian
Copper Company
1
World Class
Resource Base
2
Resource
Growth through
Exploration
3
4
Integrated,
Well Invested
Asset Base
5
6
Supported by
leading metals and
mining company -
Vedanta
7
Expansion Program
Progressing Well
Valued Local
Partner, Recognise
d for its Social
Stewardship
13

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Kcmpresentation november2012

  • 1. Konkola Copper Mines plc November 2012
  • 2. 1 Disclaimer The views expressed here may contain information derived from public and non-publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of this information. Any forward looking information in this presentation including, without limitation, any tables, charts and/or graphs, has been prepared on the basis of a number of assumptions which may prove to be incorrect. This presentation should not be relied upon as a recommendation or forecast by Konkola Copper Mines plc (“Konkola"). Past performance of Konkola cannot be relied upon as a guide to future performance. This presentation contains 'forward-looking statements' – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as 'expects,' 'anticipates,' 'intends,' 'plans,' 'believes,' 'seeks,' or 'will.' Forward–looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertainties arise from the behaviour of financial and metals markets including the London Metal Exchange, fluctuations in interest and or exchange rates and metal prices; from future integration of acquired businesses; and from numerous other matters of national, regional and global scale, including those of a environmental, climatic, natural, political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results to be materially different that those expressed in our forward looking statements. We do not undertake to update our forward-looking statements. This presentation is not intended, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities in Konkola or any of its partner group company undertakings or any other invitation or inducement to engage in investment activities.
  • 3. 2 Konkola Copper Mines – A Leading Copper Company…  688.9 Mt of copper reserves & resources, 13.6 Mt of contained Cu  Konkola underground mine grade of 3.55% with 24+ years mine life  New 300+ktpa Nchanga smelter; New East and West Mill concentrators; Second Cobalt Recovery Furnace  Konkola Deep Mining Project (“KDMP”) mid-shaft loading commissioned in April 2010 and waste hoisting from bottom-shaft commissioned in October 2012  Growth in copper production from 200 kt production in FY2012, targeting production of 400+ ktpa through brownfield expansion  Further cost reduction and stabilisation: targeting sustainable cost performance of <$1.50/lb C1 integrated cash costs  The largest private employer in Zambia in terms of the number of employees and third-party contractors  Zambian Government remains an important shareholder of KCM  Committed to training and developing the local workforce  Local communities: Numerous health, education and welfare programmes Substantial high grade resources and reserves Well invested production facilities Valued local partner Substantial production growth and cost reduction Strong working relationship with Zambian government
  • 4. 3 Nampundwe  Underground pyrite mine  Concentrator Overview of KCM Assets Zambia ...in the Heart of the Zambian Copper Belt Nkana (Kitwe)  Refinery  Smelter (incl. acid plant) Zambia KCM Group operations Other operators Lusaka Tenke Kamoto JV Frontier Kansanshi Lumwana Chambishi Ndola Kabwe Main Highway Routes in Zambia Kitwe Konkola (Chililabombwe)  Underground mine with 3 shafts (KDMP)  New Concentrator  Old Concentrator  Backfill Plant Nchanga (Chingola)  Underground mine with 2 shafts  Open pit mines (2 operational)  2 new concentrators (East and West mills)  2 old concentrators  Tailings leach plant (incl. SX-EW facilities)  Smelter with acid plant  Acid plant  Refractory ore stockpiles (CRO) $2.6bn of capital invested to-date, in a stable regulatory and democratic environment Nchanga Open Pits Konkola Deeps Copper R&R by Asset Konkola 82% TotalCopperReserves& Resources: 13.6Mt Konkola UG Nchanga UG Nchanga – OP Tailings Dam Refractory Ore
  • 5. 4 Integrated, Well Invested Asset Base Mines Concentrators Smelter Refinery Products Nchanga (open pits) Nchanga Nchanga Nkana Refinery Copper Cathode Nchanga (underground) Nchanga Tailings Leach Plant Konkola (underground) Konkola Tailings Stockpile Purchased Concentrate Nampundwe (underground pyrite mine and concentrator) Old Konkola Concentrator Nkana Smelter Cobalt Slime Acid Under care & maintenance/restricted use By-products Refractory Ore (CRO) Refractory Ore (CRO) Fully integrated operations in mining, concentrating, smelting and refining
  • 6. 55 Investment Cornerstones  Caters to enhanced mining out put  Improved recovery and concentrate grade 10.5 mtpa processing capacity Both commissioned in 2012 New East & West Nchanga Concentrators Project Description Capacity Status New Nchanga Smelter  State-of-the-art technology  Benchmark Sulphur Capture 311+ ktpa Commissioned in 2008 2 Konkola Deep Mining Project  Enhanced mining up to 1,500 M depth  Mine life extension to 30 years 7.5 mtpa at 3%+ Cu Bottom Shaft waste hoisting commissioned in 2012 3 New Konkola Concentrator  Caters to enhanced mining out put  Improved recovery  Improved Concentrate grade 6 mtpa processing capacity Commissioned in 2007 1 Tailings Leach Plant Expansion  Increase capacity at current facility from 42ktpd to 47ktpd & finally 55ktpd 75 Ktpa Commissioned in 2012 4 Chingola Refractory Ore Project 50 Ktpa Under review  Harnesses 150mt Refractory ore stock pile  Uses entire acid from Nchanga Smelter 8 5 Second Cobalt Recovery furnace  Increase cobalt recovery from 37% to 70% 1,350-1,400t of cobalt Commissioned in 2012 6 Upper Ore Body Project  Increase Nchanga Under Ground life by 22 years Sustain NUG at 2.5 Mtpa Project development underway 7 5
  • 7. 6 Investments - The New Nchanga Smelter
  • 8. 7 Investments – Konkola Deep Mining Project
  • 9. 68 83 34 27 H1 FY12 H1 FY13 -22% 102 110 8% Increase % -22% FY2013 Interim Update Finished Production (ktpa)  Shaft 4 equipping complete  Waste hoisting from bottom shaft has commenced  High speed tramming at 2900 ft level complete  Dewatering secure with power backup generation  Primary development has picked up pace with induction of new partners  Concentrator already commissioned Konkola  New East Mill concentrator fully stabilized  New West Mill concentrator fully commissioned and flotation circuit fully stabilized  Second CRF commissioned and cobalt recovery has increased  UOB development on track Nchanga  Induction of diverse new talent  Formation of Growth/strategic planning cell to drive key growth initiatives  Increased deployment of technology and TQM methodology across the organization Organisational Initiatives Integrated Custom 8
  • 10.  Safety, Health, Environment and Quality policies regularly monitored and reviewed – Significantly reduced LTIs between 2000 – 2011  Received internationally recognised occupational health and safety certification: – International Golden Peacock Award for occupational health and safety – British Safety Council Award in April 2009 and April 2010 – Zambia Federation of Employer’s award for best safety and occupational health policy in 2009 KCM Lost Time Injury (“LTI”) Track Record1 Source: Company (1) Full year data for the calendar year ending December. Focus on Safety 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 0 50 100 150 200 250 300 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 LTIFR/LTISR LTIEvents LTI Events LTISR 2Khrs LTIFR 200Khrs 9
  • 11. Environmental Stewardship  KCM seeks out and invests in new technologies and operational improvements to prevent or minimise the negative impact of its operations on the biophysical and social environment – KCM’s new smelter complex in Nchanga achieve sulphur recovery factor exceeding 97.5% and eliminates >99% of sulphur emissions  Governed by principles of sustainable development – Achievement of the British Standards Institution’s International Standards Organisations (“ISO”) 14001 certification for Konkola and Nampundwe mines – Investments in programmes to promote reforestation and better agricultural practices. Current project include an initiative to reduce indigenous timber consumption through use of plantation timber  At Konkola operations, significant success has been achieved in bringing down total suspended solids (TSS) in discharged water from an yearly average of 200mg/L in 2009 to below 70mg/L in 2012. – Current performance is well within statutory limits – Lower TSS has improved pump and power efficiencies 20112010 2012 600 200 0 400 200920082007 Konkola TSS mg/L 10
  • 12.  Zambia’s biggest private supporter of sport – Sponsor of 2011 and 2012 Zambia Open golf championships – National soccer league (KCM-FAZ league) from 2005-2010 – Four KCM national football clubs – Sports infrastructure support – District school football tournaments 11 Community Welfare: Education, Sports and Recreation Education  Runs two trust schools – provide primary and secondary education to over 1,800 children of mine employees and related communities  Provide computer equipment and computer laboratories in government high schools in local communities  Provide training for teachers in IT skills  Committed to provide several years of computer maintenance support to schools  Maintains scholarship programmes – Scholastic Excellence Award to top performers  Constructed early childhood care and development centres in Chililabombwe and Chingola for Marketeers’ children Sports and Recreation
  • 13. 12 Local Economic Development and Healthcare Initiatives  Sustainable Livelihood Programmes: – Promote income generation among vulnerable groups – Cattle distribution to women  Goat rearing for small-scale farmers  Widows Tailoring Project – Supported the development of two widows tailoring and designing co-operatives – Industrial garments were made by women to sell to KCM – Supported small-scale agricultural activities Local Economic Development Healthcare Initiatives  Child-aid partnership with DAPP (NGO) – Improve living conditions for up to 15,000 households in Chingola and Nampundwe  Infrastructure Support projects – Sinking 2 boreholes for rural communities in Chingola to provide potable water – Development of water and sanitation facilities at Nyimba’s Kenneth Kaunda Children of Africa Foundation – Spent over $5m on road and street lighting repairs  KCM runs 2 hospitals - the Nchanga South Hospital and Konkola Mines Hospital – Rank among the best in the Southern African region – Run by highly-qualified and experienced consultants covering medicine, surgery, paediatrics, urology, orthopaedics, obstetrics, gynaecology and anaesthesia  KCM also runs 5 satellite clinics around its operational areas – The “Rollback” Malaria Control Programme started in 2000 has been recognised as one of the most successful malaria eradication initiatives – Successfully reduced the prevalence of the disease in and around its operations by over 80% – No malaria death recorded at any of the KCM Group’s health facilities since 2002  2012: Launched a major eye-care initiative to screen and treat members of society for diabetes-related eye conditions in and around the areas of KCM operations  2009/10: The “Moneni2” Project – Distribution of 23,000 pairs of eye glasses to school-going children and adults of over 40 years of age suffering from short or long-sightedness  2008: The “Moneni” Eye Cataract Project – Helped to restore the sight to 171 elderly people during a campaign in which over 3,000 people were screened and treated free-of-charge for various eye conditions  2007: Door-to-door family health check programme – Provide basic health information, counselling & general health checks to mitigate impacts of HIV/AIDS  2006: Provided artificial limbs to people in Zambia
  • 14. Summary A Leading Zambian Copper Company 1 World Class Resource Base 2 Resource Growth through Exploration 3 4 Integrated, Well Invested Asset Base 5 6 Supported by leading metals and mining company - Vedanta 7 Expansion Program Progressing Well Valued Local Partner, Recognise d for its Social Stewardship 13