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AEL – A South African Manufacturer Of Explosives Now Listed On The Lusaka Stock Exchange …

 

FILL IT UP An AEL Zambia re-pump emulsion truck filling up at the company’s plant outside Mufulira

Picture by: AEL

FILL IT UP An AEL Zambia re-pump emulsion truck filling up at the company’s plant outside Mufulira

By: Jonathan Faurie

Commercial explosives manufacturing and distribution company, African Explosives (AEL) has made a long-term investment in the Zambian Mining industry by listing on the Lusaka Stock Exchange says AEL international business director Stuart Wade.

The listing was confirmed in October 2006, Zambian investors and employees currently hold 20% of the company’s shares.

Wade reports that Zambia has traditionally been a large business hub for AEL. During the 1990s there was a slow down in mining activities but renewed interest in the region has made AEL’s Zambian expansion more possible and there are now significant investment plans.

“The company is in the process of upgrading, investing, reconfiguring, and aligning itself around the growth in the market place,” says Wade. This investment will expand the companies regional presence in Central Africa. The investment is configured to deliver products, blasting solutions and develop long term partnerships with customers.

Wade says that AEL Zambia is in a position in Africa to support both itself and the region and feels that the Zambian operation has the biggest growth potential. Copper, which is abundant in Zambia, is in huge demand at the moment contributing to the fact that the Zambian and the Democratic Republic of Congo (DRC) operations are positioned to take part in the mining boom in the Central African region.

AEL has earmarked Zambia and the DRC as strategic growth areas for the company. Wade reports that the amount of money that is currently being invested in Zambia could be doubled when AEL DRC is fully established in the coming years. The company has achieved this growth through five board approved investment projects that are being executed in order to grow in Zambia.

Meanwhile, AEL has confirmed its involvement at Australian miner Equinox Minerals’ Lumwana mine in north western Zambia, reports Wade.

“This is by far one of the biggest greenfields projects that we have worked on to date,” says Wade.

The mine is 65 km west of the town of Solwezi. Equinox has acquired a large-scale mining license, which covers an area of around 1 355 km2, and includes two major copper deposits, Malundwe and Chimiwungo, as well as 27 exploration prospects.

The two copper deposits are 7 km apart, and will be mined sequentially by openpit mining methods. AEL reports that the mine design forecasts the extraction of 348-million tons of ore. Equinox has allocated land and amenities to mine supply partners to supply the mine, and plans to establish a town site to cater for up to 5 000 people.

AEL Zambia MD Wayne Du Chenne pointed out that the size of Lumwana, and the explosives needed to mine 20-million tons of ore a year, would require the erection of a bulk emulsion manufacturing plant on site to produce 3 000 t of bulk emulsion that will be required in the third year of the operation.

“Added to this, will be three to four mobile manufacturing units that will travel to the benches and deliver the emulsion down the hole. This infrastructure and capital equipment will require an investment of close to R30-million by AEL,” Du Chenne reveals.

Wade explains that the company has already been through the preparation phase of the project and is currently commencing with the building of magazines and civil work on the bulk emulsion plant. Once completed, AEL will have a bulk explosives manufacturing plant within the mine’s light industrial area Wade reports that once the site is fully functional it will conform to all the client’s requirements from the international fire protection standards to the environmental protection requirements.

Wade reports that the construction phase to bring the plant to full capacity will be completed by the first quarter of 2008.

Wade says the contract between AEL and Equinox will cover a period of ten years. While not disclosing the value of the Lumwana contract, he commits that the company’s Zambian operation faces even further expansion.

AEL is further positioning itself to start explosives supply to First Quantum Minerals, frontier mine in the DRC. The mine is still in the early stages of its development with pre-stripping and establishment of the mine is currently in progress.

He reports that the changing legislative environment, taxes, duties and logistics are the biggest challenges that the company faces in Africa.

Wade adds that the industry-wide lack of skilled labour is a concern for AEL. “AEL is currently manning itself up with competent people from each region who are able to work in the highly technical environment of explosives,” says Wade.

Wade feels that skills transfer is a key area that AEL has been focusing on as part of its long term strategy, “when we enter into new projects in Zambia we use the existing employees and structures to man up the projects. This provides excellent opportunities to grow local skills and competencies for future business growth,” he says

AEL also runs businesses in Ghana, Botswana, Zimbabwe, Ethiopia, Tanzania, Mali, Guinea, and Burkina Faso.

“AEL has set up business hubs in Central, Eastern, and Western Africa to service the needs of clients outside of South Africa,” Wade concludes.

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