Tag Archives: Cobre Panama

First Quantum and Panama Government agree on draft contract for Cobre Panama

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First Quantum Minerals Ltd and its Panamanian subsidiary, Minera Panamá, S.A. (MPSA), have agreed and finalised the draft of a concession contract with the Government of Panamá related to continuing operations at the Cobre Panamá copper-gold mine.

The Proposed Concession Contract meets the objectives outlined by the Panamanian Government in January 2022 related to government revenues, environmental protections and labour standards, according to FQM. It also provides legal protections necessary to both parties to ensure durability and stability.

The contract is subject to a 30-day public consultation process and approvals by the Panamanian Cabinet, Comptroller General of the Republic and the National Assembly. The Proposed Concession Contract will have an initial 20-year term, with a 20-year extension option and additional extensions for the life of mine.

Additionally, the Panamá Maritime Authority has confirmed it will issue a resolution today for MPSA to resume concentrate loading operations at the Punta Rincón port. Loading operations were halted back in January with FQM saying the reason was tied to allegations its scale was improperly calibrated. Soon after this, First Quantum halted ore processing operations, saying the action was a result of the Panamá Maritime Authority’s refusal to permit copper concentrate loading operations at the mine’s port, Punta Rincón, in accordance. Ore processing is expected to resume and restore the mine to full production levels over the next several days.

The two companies have been engaged in a long-running contract dispute that hinges on disagreements over tax rates and royalties at the Cobre Panama mine.

The proposed contract will include the following principal economic terms once it takes effect:

  • Payment by MPSA of $375 million plus an additional $20 million to cover taxes and royalties up to the year-end 2022
  • Payment by MPSA starting in 2023 of an annual minimum contribution of $375 million in government income, comprised of corporate taxes, withholding taxes and a profit-based mineral royalty of 12 to 16 percent, with downside protections;
  • Downside protections to the annual minimum contribution under the following conditions:
    • Until the end of 2025, copper price below $3.25 per pound; and
    • From 2026 and beyond, a total tax contribution for that year of less than $300 million.
  • Applicable royalty rate (the operating margin and the effective royalty rate) at various operating margins as shown below:
    • 0-20% – 12%
    • >20-30% – 13%
    • >30-40% – 14%
    • >40-50% – 15%
    • > 50 – 16%
  • Application of the general regime of income tax, including deductions for depletion, and withholding taxes in Panamá.

Tristan Pascall, Chief Executive Officer, said: “After a lengthy and arduous negotiation process, the finalised Proposed Concession Contract outlines the basis for the future of Cobre Panamá for all stakeholders, including the government, our investors and the country of Panamá. I am pleased that we now have a pathway to continuing our ongoing substantial investments in the country. I wish to thank our Panamanian and international employees and their families and our suppliers for their patience and resilience during this time. We now await formal approval of the Proposed Concession Contract and look forward to a long and constructive partnership with the Government of Panamá for many years to come.”

First Quantum and AES sign renewable energy deal for Cobre Panama

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First Quantum Minerals’ majority-owned Cobre Panama operation has signed a long-term contract with AES Panama for the supply of renewable energy, starting in January 2024.

The agreement establishes that the energy supplied by the electricity generation company to the copper mine will be certified renewable energy from solar, wind and hydroelectric sources.

The CEO of First Quantum Minerals, Tristan Pascall (right), and the President of AES Panama, Miguel Bolinaga, gathered to sign the contract (pictured).

“As a responsible mining company, we recognise our obligation to contribute to the management and mitigation of climate change and part of our contribution is through a transition to clean energy sources in our operations, including Cobre Panamá,” Pascall said.

“The global need to accelerate the transition to the use of cleaner energy will require an increase in the production of minerals and metals, such as copper, used in solar panels, wind farms and electric vehicles. This agreement for the energy transition of our operations is also a logical step to increase the sustainability of our production.”

Miguel Bolinaga, President of AES Panama (left), said: “One of the main goals of AES at a global and local level is to lead the energy transition, which is why for us offering cleaner energy solutions to our clients is a priority.”

The Operations Superintendent of the Panama Copper Power Plant, Boris Batista, said the agreement with AES would cover the plant’s need for more power, and that all this additional power – 64 kW – would come from renewable energy sources.

Other steps would follow in the process of reducing carbon emissions at Cobre Panama. By 2025, 30% of the energy used in Cobre Panama’s operations is expected to come from renewable sources. For its part, the First Quantum Minerals group plans to reduce its carbon emissions in its global operations by 50% by 2030.

Tristan Pascall to take the First Quantum reins in May 2022

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First Quantum Minerals has announced that its Board of Directors will appoint Tristan Pascall, currently the company’s Chief Operating Officer (COO), to the role of Chief Executive Officer (CEO).

The appointment will take effect at the Annual General Meeting to be held in early May 2022, at which time Philip Pascall (Tristan’s father), the company’s current Chairman and CEO, will retire from the CEO role and will continue to serve as Chairman of the Board. The company will nominate Tristan Pascall for election as a director at the AGM.

The appointment of Tristan Pascall represents the culmination of a succession planning process led by independent directors on the Board’s Nominating and Governance Committee, comprised of Robert Harding, Andrew Adams and Kathleen Hogenson.

Robert Harding, Chair of the Nominating and Governance Committee and Lead Independent Director, said: “After a thorough search process, we are very pleased to appoint Tristan Pascall as First Quantum’s next Chief Executive Officer. Tristan has demonstrated impressive leadership in his current role as COO as he navigated the successful ramp-up of our largest asset through the challenging environment presented by the global pandemic.

“Tristan’s previous hands-on leadership experience of eight years in Zambia and four years in Panama has given him a deep knowledge of our assets, operating teams and local partners. His practical, on-the-ground experience with our people and projects, combined with lessons learned from the countries where we operate, embodies the company’s culture and makes Tristan the right leader for First Quantum.

“We believe Tristan’s combination of operational, strategic and capital markets experience, as well as the strong stakeholder relationships he has developed, are fundamental to the continuity of our unique core capabilities, namely industry-leading project execution and operational excellence.”

Tristan Pascall joined First Quantum in 2007 and held progressively senior operational roles in Africa and Latin America until 2020 when he served as Director of Strategy and later became Chief Operating Officer in January 2021. Prior to assuming his executive leadership roles, he was a key member of the teams that delivered on several major greenfield and expansion mining projects which now collectively represent most of the company’s net asset value, FQM said. His responsibilities from 2009 to 2015 included the initial development, construction and operating the Sentinel mine in Zambia. Starting in 2015, he led the development of the Cobre Panama mine (pictured), now the company’s largest copper mine with the world’s largest single-throughput copper concentrator plant, and built the operations team which now stands at more than 5,000 people.

Prior to joining First Quantum, Tristan spent eight years in corporate finance and investment banking with a focus on resources and heavy industry in Australia, Europe and Asia.

Tristan Pascall said: “I am very excited to continue to build upon the momentum we have established at First Quantum. It is deeply humbling to be selected to lead such a highly talented team, all of whom have contributed to establishing a unique entrepreneurial culture. As we enter our next stage of growth, I look forward to building on First Quantum’s accomplishments of the past two decades.”

Philip Pascall co-founded First Quantum Minerals in 1996 and has served as its CEO and Chairman ever since. He retires as one of the longest-serving CEOs among the world’s major mining companies. Over the course of his stewardship, the company has grown from the construction of the Bwana Mkubwa project in Zambia designed for 10,000 t/y of copper production, to become the world’s sixth largest copper producer. First Quantum has operations on five continents, employing more than 20,000 people and producing over 800,000 tonnes of copper annually.

Harding said: “On behalf of the entire company, I would like to thank Philip for his extraordinary leadership. Over the span of a quarter century as CEO, Philip has demonstrated a capacity to solve problems others could not and to bring unique solutions to complex project issues. The Board believes his ongoing involvement as Chairman will be a significant competitive advantage and form a uniquely complementary combination with Tristan’s hands-on, collaborative leadership style.”

First Quantum to operate world’s largest ultra-class truck trolley fleet with Liebherr T 284

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The day after announcing it will accelerate the implementation of its existing low carbon solutions and trigger future projects at MINExpo 2021, Liebherr has confirmed that it will supply a further 11 T 284 trucks to operate on trolley lines at First Quantum Minerals Limited (FQML)’s Sentinel and Cobre Panama mines with the miner claiming, in the process, the title of the world’s largest ultra-class truck fleet on trolley.

In 2013, Liebherr received an initial request from FQML to develop a 360 t trolley-capable haul truck for mine sites in Panama and Zambia. The trucks were required to integrate with the trolley power line that FQML had designed and developed for the sites.

Agreeing to this partnership, Liebherr engineers began developing, testing and verifying the trolley solution. Two Liebherr T 284 trucks with the Trolley Assist System were commissioned at Sentinel copper mine in Zambia in 2016 and testing of the trolley solution began in February of 2017, with 12 months allotted for the customer to evaluate the trucks, the trolley and the customer service.

At the end of the trial period, FQML expressed it was pleased with the results of the Trolley Assist System and the performance of the T 284, leading to an order for six more trolley-capable T 284 trucks at Sentinel mine, along with 30-trolley-capable T 284 trucks for Cobre Panama copper mine in Panama, Liebherr says.

As a mark of success of the partnership between FQML and Liebherr, along with the performance of the T 284 with trolley solution, FQML recently confirmed an order for a further 11 T 284 trucks. These three trucks for Sentinel mine and eight trucks for Cobre Panama mine will join the existing fleets operating with the Trolley Assist System. This soon-to-be fleet of 38 T 284s in Panama will claim the title of the world’s largest ultra-class truck fleet on trolley, according to Liebherr.

“Trolley Assist truck systems have become integral to the development of First Quantum’s large scale open-pit truck haulage operations,” an FQML representative says. “Over the last decade, First Quantum has emerged as one of the industry leaders in implementation of Trolley Assist systems across mine planning and design, installation, operations, and maintenance. We consider our purpose designed Trolley Assist systems deliver a step change in measurable haulage performance through increased truck productivity, improved maintenance cost, and reduced carbon emissions.

“During the past five years, Liebherr has proven itself as a proactive partner in the development of Trolley Assist capable truck fleet systems. First Quantum has selected the Liebherr T 284 ultra-class truck for some of our Trolley Assist deployments at our large-scale mining operations in Zambia and, more recently, as the sole deployed truck at our Panama mining operations. With a high degree of co-operation between our organisations, we see this partnership continuing to grow in years to come.”

Oliver Hoelzer, Director of Mining Liebherr-Panamá, says: “Even before the arrival of the very first truck, Liebherr Panama’s relationship with FQML Panama has been more of a mutual partnership than a pure business relationship. Our highly committed team recognises that Liebherr’s own success is intrinsically linked to the success of FQML.”

Liebherr has also delivered six trolley-capable 100 t T 236 haul trucks to the Erzberg iron ore mine in Austria, bringing the total number of Liebherr trucks with the Trolley Assist System to 56 once FQML’s newest fleet has been commissioned.

Liebherr aims to offer fossil fuel free solutions for its entire digging, dozing, and hauling product range by 2030.

ABB increasing milling power and availability with GMDs

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As IM goes to press on its November issue, which includes a feature on Drives and Controls, one of the leaders in this space, ABB, reflects on the spate of new copper miners to have opened up in South America, Russia and Kazakhstan, and the drive solutions powering them forward.

This online editorial feature also comes as ABB’s solution for the Cobre Panama open-pit copper mine moves into continuous operation.

Gearless mill drives (GMDs) are the grinding solution of choice in challenging environments. By eliminating bolt-on mechanical components such as ring-gears, pinions, couplings and gearboxes, GMDs offer ore producers unrivalled availability, efficiency and durability, while reducing operating expenditure, according to GMD provider ABB.

“Both ring-geared mill drives and GMDs can be employed to drive autogenous, semi-autogenous (SAG) and/or ball mills,” says Marcelo Perrucci, Global Product Line Manager, Grinding, at ABB.

“The applications may be the same, but the challenge now is to develop bigger drivetrains with the power to drive these larger grinding mills – and this is exactly where GMDs come into their own.”

Energy savings

Unlike more traditional ring-geared mill drives – where a ring-shaped gear encircles the mill and drives it through one or two pinions followed by conventional motors – GMDs work by mounting rotor poles directly to the mill body and surrounding it with the stator ring, meaning the mill itself is incorporated into the motor.

The necessary torque to turn the mill is transmitted between the GMD motor and the mill via the magnetic field in the tiny air gap between the stator and rotor. Because this type of motor system requires no gearing or direct contact transmission, GMDs boost efficiency by reducing frictional losses, while fewer mechanical critical components means less maintenance downtime is required due to wear and tear, according to ABB.

“GMDs offer the highest power and availability compared to other driving methods,” confirms Perrucci. “Efficiency gains are possible by eliminating mechanical components that may fail and add unexpected and costly bottlenecks in the production process.”

ABB GMDs use a high efficiency cycloconverter to drive the motor. The same efficiency applies to other system components like transformers and the motor control centres incorporated into ABB’s E-house solution called Control Block; together, these advancements can boost energy optimisation in grinding mills by as much as 3%, according to the company.

“That equates to a significant amount of money saved, especially when you consider that some modern mines may have as many as six 15–25 MW GMDs running in parallel,” explains Perrucci.

Visualisation

Advancements in big data, and digital technologies such as the industrial internet of things, the cloud, data analytics, artificial intelligence and advanced modelling algorithms now offer mining companies unprecedented visualisation and transparency along the entire mine production chain, enabling them to carry out predictive rather than reactive maintenance operations from remote locations.

Using the ABB Ability™ cloud platform, GMD operators can access key system parameters, gathering and collating real-time data from sensors in the system, everything from insulation monitoring to status of the air gap to the temperature of rotor poles and stator windings.

Every hour of unplanned shutdown in a mine can cost the operator hundreds of thousands of dollars. Predicting when key parameters will reach critical levels and halt production is, therefore, crucial.

Using data sets collected from the GMD that are processed by specialised algorithms in the ABB Ability Cloud platform, together with ABB engineers, critical situations can be predicted and then timely notify customers in advance, avoiding costly downtimes.

Perrucci uses a real-world example to illustrate the point: “The system alerted us to the fact that there was an anomaly in the air gap between the rotor and the stator,” he recalls. “The ABB Ability predictive maintenance system sent an automatically generated SMS and email to the customer and to ABB’s lifecycle manager advising them to check it. They stopped the machine and found a small nut in the air gap that could have scratched the insulation and maybe even caused something more serious. An investigation followed as to identify why the nut was there in the first place and the most plausible cause was that somebody accidentally dropped it while inspecting the machine.

“We have reports from customers that almost 100 hours of downtime have been avoided by using this proactive approach to servicing,” he said.

Perrucci added: “All this is only possible if the machine has the right instrumentation in place.

“Much like a passenger airplane, GMDs are equipped with dozens of sensors to protect it and help the operators to run it smoothly. ABB makes no compromise in its availability-centred design. Our focus is not to eliminate critical protection components of the system to cut costs. We want to give operators peace of mind and allow them to embark on the 4th Industrial Revolution. This is only possible if we have the right instrumentation in place as well as a robust condition monitoring system. To date, ABB has the capability to remotely support over 100 mills in operation, while over 30 of them are already benefiting from our ABB Ability predictive maintenance platform.”

Improving insulation and preventing moisture ingress

Water and moisture ingress can potentially be a significant issue in ring motors, especially at sites with high levels of precipitation and humidity. In 2005, ABB modified its insulation system and, more than 100 machine years and 6 million operating hours later, no major problems have been reported.

“Our heat exchangers – located in the cooling box structure – are solely installed on the bottom of the motor, for example, meaning there is no risk of water ingress elsewhere, whereas in non-ABB GMD designs the cooling boxes are placed around the stator, increasing the risk of water leakage,” explains Perrucci.

“We also use leak detection instrumentation in the cooling boxes, humidity and air temperature sensors, differential pressure transmitters and flow meters to detect any leak due to any changes in these parameters.

“Our single-bar winding design concept allows for full continuous vacuum pressure impregnated insulation. We can also employ online partial discharge monitoring, especially when the mine is situated in high altitude areas, such as in Chile and Peru.”

Case studies: Aktogay and Bozshakol

ABB has partnered with Kaz Minerals to supply GMDs for the company’s Aktogay and Bozshakol copper mines in Kazakhstan, both of which are expected to process 25 Mt/y of ore.

ABB was awarded a multi-million contract to provide a 28 MW GMD for a 40 ft (12.2 m) SAG mill and two 22 MW drives for a pair of 28 ft (8.5 m) ball mills at Aktogay, and three identical systems at Bozshakol. Each includes phase and excitation transformers, a ring motor with a local mill control panel, and a containerised electrical house (E-house) including cycloconverter and advanced specific grinding control software.

“We are currently working on the expansion of Aktogay, which aims to double its capacity,” explains Perrucci. “ABB will install an additional 40 ft, 28 MW SAG mill and two 28 ft, 22 MW ball mills to the project in order to meet the challenge of higher-capacity production coupled with low ore grades.

“It obviously costs operators less in terms of capital expenditure to expand existing operations rather than build a new mine, and we have added more digital streaming capabilities to these new GMDs.

Global reach

Since the first GMD was delivered in 1969, ABB has sold more than 130 units in 23 countries and currently has over 50% market share, it says.

“We are investing a lot in the ABB Ability platform and also improving our existing GMDs to make them even better in terms of predictive modelling,” says Perrucci. “ABB is also working on digital twin technology, using augmented and virtual reality for training and maintenance.

“This will allow us to build up a virtual picture of the GMD system and environment so that maintenance can be carried out in the mixed reality platform before it is applied to the actual machine.”

ABB’s six gearless drives at heart of first copper production at FQM Cobre Panama

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Copper production is underway at large open-pit mine Cobre Panama, owned by First Quantum Minerals Ltd. Technology leader ABB has deployed six ABB Gearless Mill Drives in Panama resulting in commercial concentrate production, which was announced this month.

Cobre Panama, which spans 13,600 hectares, is located 120 km west of Panama City in the Donoso district, Colon province and 20 km from the Caribbean Sea coast. The first project of its kind in Panama, Cobre Panama has significant copper deposits that are expected to be explored over the next 30 to 40 years and is forecast to contribute up to 5% of Panama’s gross domestic product (GDP). The Panamanian company that holds the Cobre Panama concession, Mineria Panama SA (MPSA), was incorporated under the laws of the Republic of Panama in January 1997.  Following a period of ownership transition, First Quantum Minerals, a well-established and growing metals and mining company, increased its ownership of Cobre Panama to 90% in November 2017.

The six ABB Gearless Mill Drives, which are the most powerful mill drive systems on the market for semi-autogenous (SAG), ball and autogenous mills, have been installed since late last year and are all now in continuous operation.  Two 28 MW gearless mill drive systems (GMDs) are operating in the company’s 40 ft SAG mills and four 16.5 MW GMDS are employed in 26 football mills along with associated control systems.

“Gearless mill drives are the ‘workhorses’ for grinding operations which are at the heart of any mine. The six ABB GMDs at the world class Panama Cobre project are extremely robust given demanding ambient conditions.  As the ore extraction pace indicates they are maximising throughput,” said Rene Chacon, Project Manager at ABB for Cobre Panama. “They allow operators to react to changes in ore characteristics due to variable speed and, by optimising the process, are more efficient in their use of grinding power.”

ABB has also installed its extended automation system, ABB Ability™ System 800xA at Cobre Panam, which empowers mine operators to drive efficiency, by making more accurate and timely decisions. ABB Ability Remote Service Centers, which provide state-of-the-art remote diagnostic services, maintenance reports, remote online monitoring of critical assets, and access to ABB’s product and maintenance experts are also installed.

ABB Gearless Mill Drives such as those at Cobre Panama can operate under the most extreme environmental conditions like high altitudes or varied climates in remote locations. Due to their optimised design, they maximise reliability and availability of grinding mills.

First ore for FQM’s Cobre Panama copper mine

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First Quantum Minerals has introduced first ore to the processing plant at its 74 Mt/y Cobre Panama open-pit copper mine in Panama.

On February 7, ore was introduced through primary crushing and onto the stockpile with initial feed rates between 4,000-5,000 t/h. Then, on February 11, ore was introduced through to the first milling circuit.

Operation on ore continues and will move into all other sections of the processing plant including producing copper concentrate, according to First Quantum. The company is now focused on an efficient phased ramp-up for Cobre Panama continuing through 2019.

At full tilt, Cobre Panama is expected to produce 350,000 t of copper from an in-pit crushing and conveying set up that includes four box cuts with semi-mobile primary crushers – two per conveyor line – feeding two in-pit conveyor lines that feed two overland conveyors after a transfer station to the secondary crushing and the main process plant. The company uses a fleet of Komatsu Mining P&H 4100XPC electric shovels; 363 t Liebherr T 284C trucks, Komatsu Mining Le Tourneau L2350 large wheel loaders (with SR drive), Liebherr R 9350 hydraulic excavators and Cat 777G 100 t trucks at the operation.