Phu Bia boosts copper output

Phu Bia Mining Limited (PBM) anticipates that copper production will increase to 60,000 tonnes in its first full year of production next year and to 75,000 tonnes in 2010 after expansion of the plant.

Deputy Prime Minister and Minister of National Defence, Lieutenant General Douangchai Phichit ( first right ), other officials and business operators cut a ribbon to start commercial operation of the Phu Kham Copper-Gold Mine. -- Photo Khamphanh

“We expect to boost production after finding more resources in the area, as we recently announced when updating our mineral resource and ore reserve estimates for Phu Kham,” said PBM Chairman Chanpheng Bounnaphol last Friday.

Speaking at the start of commercial operation of the Phu Kham Copper-Gold Mine in Xaysomboun district, Vientiane province, Mr Chanpheng said that with regard to gold production the company expected to produce 60,000 ounces in 2009 and then 65,000 ounces in 2010, while silver production would be at a constant 600,000 ounces a year starting in 2009.

PBM is a private company, registered in Laos with 90 percent of shareholdings retained by Pan Australian Resources Limited (PNA) and 10 percent by the Lao government. The minerals extracted are mainly exported to China .

The company has recently completed construction of the Phu Kham Copper-Gold Concentrate Project. “This will enable us to produce 200,000 ounces of copper a year,” said Deputy Minister of Energy and Mines Somboun Rasasombath.

“PBM commissioned the Phu Kham Copper-Gold Operation within the 2.1 trillion kip (US$241 million) capital budget,” said PNA Chairman Bob Bryan.

The project will ramp up to full production through 2008 and is likely to produce about 30,000 tonnes of copper by the end of this year.

At full production, and using the current plant processing configuration, Phu Kham will have an ore throughput of 12 million tonnes per annum.

“But we are already committed to expand this throughput to 16 million tonnes a year by the start of 2010,” Mr Bryan said.

PBM has transformed itself from a mineral explorer into a copper-gold producer within the Southeast Asia region since its establishment in 1994. It has carried out extensive exploration and feasibility studies for copper and gold operations in the contract areas.

In 2005 it started construction of the Phu Kham Heap Leach Gold Project, which had a production capacity of 50,000 ounces of gold annually.

“As of 2007 PBM had produced gold bars weighing 63,792 ounces with an export value of 421 billion kip (US$47 million). This was significant growth for the mining sector and for the Lao economy. The Lao government received 12.88 billion kip as a result,” Mr Somboun said.

Advanced exploration and a pre-feasibility study are also underway at the Ban Houayxai Gold-Silver Project, which is about 25 kilometres west of Phu Kham. There, PBM is working to identify a mineral resource that would result in another open pit development with first production by 2011.

“The target is gold and silver, with annual production in excess of 100,000 ounces of gold,” Mr Bryan said.

This year PBM will also spend 219 billion kip (US$25 million) on exploration and project evaluation within Laos , including the biggest airborne geophysical survey ever undertaken in the country to identify new prospects.

At the local level, PBM and the provincial authority have established a community development fund, which is funded by PBM with 2.6 billion kip (US$300,000) a year.

“This is to develop the local communities in compliance with the poverty alleviation policy of the government,” Mr Chanpheng said.

The development at Phu Kham has been of benefit to the local communities. More than 90 percent of the 1,140 employees at Phu Kham are Lao, of whom nearly 400 are local villagers.

PNA Managing Director Gary Stafford said the company had also launched a programme between Lao Polytechnic and Chang Mai University in Thailand to enhance the skills of Lao graduates in preparation for employment in engineering and geological roles.

As of December 2007 the Lao government had granted permits for 171 mining projects to 109 companies. This includes 50 projects under exploration and 72 under study, with the remainder in operation.

The export value of production by the mining sector was 4.7 trillion kip (US$538.66 million) last year, according to the 2007 calendar year 2007 from the Ministry of Energy and Mines.

By Phonsavanh Vongsay
(Latest Update May 12 , 2008)