Exclusive interview with Charles Carron Brown, COO of Tiger Resources – The Kipoi Mine. Mr Brown will address the annual Katanga Mining Week in October on “Defining a viable investment plan for future operations in the province”. Tiger Resources is also a gold sponsor at the Lubumbashi event as well as at iPAD DRC in Kinshasa
1. Can you tell me about a mining project in progress which you are involved and which is stimulating for your organization?
Tiger Resources has recently agreed a refinancing package for Kipoi with an Australian private investment group called Taurus to replace short term bridging finance with longer term debt. It will also provide us with some additional funds, which will allow us to undertake some initiatives to improve the performance of the plant and increase production to 32,500 tpa from the current 25,000 tpa for a very modest investment.
This debottlenecking initiative is complementary to the potential Phase 2 expansion of SXEW capacity. The Phase 2 expansion would involve the replication of the Phase 1 SXEW process train and, with the addition of the debottlenecking initiatives noted above, the Phase 2 expansion now has the potential to increase Kipoi’s capacity to 65,000tpa.
2. In your opinion what are the challenges that the mining sector in the region is facing?
Without a doubt electrical power is the number one issue, it is essential that the government gets to grips with the lack of power. To do this it is vital that an independent transmission system operator be brought in to operate the high voltage transmission network. SNEL cannot be both producer and responsible for transmission as this is a conflict of interest. If we are to have Independent Power Producers (IPPs), as is desperately needed and is proposed by the government, then the transmission of power must be transparent, regulated and independent of power generation.
What international investor would invest $100 million in a power station if he cannot be sure that his power will be delivered to his customers? The government must also look at short term initiatives to resolve the problem. Inga 3 is a great project but it will only start providing power in 2023 at the earliest and we need power now.
We are rolling out an energy efficiency project in Katanga that is showing great success and making significant savings. I will be giving a presentation on this at the Katanga Mining Week but the same must be done in Kinshasa and everywhere else in the DRC, whether connected to the grid or not. The government must ban the import of inefficient incandescent lamps and remove import duty from low consumption lamps such as fluorescent or LED lamps. They should also be doing more to encourage solar photovoltaic power stations. If used in conjunction with hydro power stations, these can make great sense and increase power availability in the dry season.
3. What has surprised you most in the mining sector during this year?
The government’s sudden desire to complete the mining code revision without further consultation. Thankfully the Prime Minister has recognised the need for further consultation and I am sure that we will be able to achieve a win-win situation. This is particularly important at this time of depressed metal prices. Mining projects are long term investments and we need stability to ensure that we can pay back our initial investment and give a reasonable return to our investors. If you look at Botswana, Indonesia and Peru they have all either deferred proposed increases in taxes or actually reduced taxes in recognition of the difficult economic conditions. Even Zambia has decided not to increase their royalties after realising that they would be destroying their industry if they continued as proposed.
4. What differentiates your company from the competition?
Our Kipoi project is the only fully agglomerated copper Heap Leach in Africa. This means that despite having no cobalt we are one of the lowest cost operators in the DRC. We also use less power than anyone else per tonne of copper produced as we do not have to use large mills to grind our ore. We crush to 25mm then after agglomeration we stack the ore on a large heap that we irrigate with acid to dissolve the copper then we take pregnant liquor solution to an SXEW in the normal way.
5. What will be your message to the iPAD DRC Mining and Infrastructure Indaba?
I will have several messages but the most important is don’t change the mining code that has attracted billions of dollars in investment into the DRC. The mines are now reaching the point where they have finished depreciating most of their investments and will start paying more taxes. Look at 2011, 2012 and 2013 where the mining sector alone has contributed $940 million, $1.1 billion and $1.3 billion respectively in taxes to the DRC Treasury. I expect even more will have been paid in 2014.
6. What will be your message to the Katanga Mining Week?
Let’s work together to fix the power. Tiger is investing $33 million to improve the 120kV network and carry out an energy efficiency project – everyone wins with this! Ordinary households get better power and light, there will be fewer power cuts, there will be more power available for SNEL to sell, more power available for the mining industry, in particular for SEK, and in the end the government will collect more taxes since the operating costs of all the miners will be reduced.. This is also a significant environmental benefit. That is seven wins. Not just the normal Win-Win.
7. What is the most important reason for participating in iPAD DRC Mining and Infrastructure Indaba?
To communicate what we are doing to the government and civil society, particularly to show off our community investment programme of which I am very proud. This includes the construction this year of a maternity clinic that will be inaugurated in October.
8. What is the most important reason for participating in Katanga Mining Week?
To exchange information with other miners and to explain what we are doing in Katanga. I think it is important that we all exchange best practice ideas to improve what we are doing, ensure environmental protection, and optimise the benefit of our operations for the local community and the country as a whole.
9. Any other information you want to share?
This is a tough time for the industry. We all, Government, Civil Society and the Mining Industry, need to work together to maintain what has been created, minimise job losses (of which there have already been some in the exploration sector), and prepare to move forward when prices pick up again, which they will but probably not for several years.