The Koka Gold Mining Project in Eritrea

  • Koka Gold Mining Project - Eritrea: Mine Operator Zara Mining Share Company

BY TESFANEWS

THE Koka Gold Mining project in Eritrea is one of the few mining projects that are owned by Chinese companies. Its operator, the Zara Mining Share Company (ZMSC), is a Gold focused company owned 60% by China SFECO Group, which is a subsidiary of Shanghai Construction Group and 40% by Eritrean State mining company ENAMCO.

In November last year, China SFECO Group acquired the Koka Gold deposit including Zara Project from Australian  company Chalice Gold Mines at US$100 million.

A US$145 million Engineering, Procurement and Construction (EPC) contract for the Koka Gold mine Construction Project is currently carried out by SFECO starting 25th September 2013.

The contract includes construction of the processing plant, mine village and Service stations for fuel, water and electric power. The work has been progressing as per schedule and installation of major items are expected to be completed by year end.

With a mine life of seven years, the 44 million tone deposit contains a JORC- compliant indicated resource of 5 million tonnes of ore at 5.3g/t Au and is expected to produce up to 850,000 oz of gold with 93% recoveries.

The first Gold pour was targeted on the third quarter of 2015.

Current EPC Contract Progress:

> Concrete work on ROM retaining completed
> Installing feeder and primary crusher
> Ball Mill Installed
> Leach tanks are in stage of erection
> Steel structure and side‐walls for thickener being assembled
> Both Cone Crushers now installed
> Installation of steel structure for thickeners
> Mine Village construction proceeding well. ZMSC taken partial occupation
> Pipe laying and welding in progress for water supply from Zara river
> Concrete structures being installed at Fuel storage area and power station
> Concrete works for footing being done on Heavy Equipment workshop

Mine Service:

> Power supply – 4 x 1,800 kW owner operated Generators for power supply
> Water ‐ Development of a bore field of four bores to produce 30 litres/sec
> Camp – Temporary Construction Camp constructed to house construction teams
> Mine Village – To house upto 400 workers. Partially commissioned

Business Partners:

> SFECO China – 60% Stakeholder
> ENAMCO – 40% Stakeholder
> Exim Bank – Project Financing Loan
> Housing & Commerce Bank – Project Financing Loan in Eritrea
> Willis Insurance Brokers Co. Ltd. – Insurance Broker
> National Insurance Corporation of Eritrea Share Co. – Insurance Provider
> Red Sea Trading Corporation, Eritrea
> Transhorn Eritrea
> Eritrean Petroleum Corporation
> Segen Construction Company, Eritrea
> Eriequip , Eritrea
> Eritrean Core Well Drilling
> Public Government Garage – Ashagolgol, Eritrea
> Other international partners – Caterpillar, Sinotruk, XCMG, Shantui, Atlas Copco, BME, Total, Suez Chemicals

Workforce:

> A workforce of up to 400 persons including contractors
> Advertising Advertising campaign campaign to secure skilled skilled and semi‐skilled skilled construction, mining  & administrative workforce
> A small ex‐patriate workforce will be required initially for training and supervision (Replace wherever possible with Eritrean Workforce over time)
> Skilled Skilled labour initially to be sourced from Asmara and Keren (Supplement with skilled labour internationally)
> Where possible local (Rikeb) labour will be employed (Currently employing several workers from Rikeb and Asmat)

Permanent Resettlement Plan:

> Funding transferred to the Anseba Regional Government, to enable work to proceed
> Cement and Construction items for building of housing units have been sent to Geftuo
> A Drill from Eritrean Core Well Drilling Company is currently drilling the water bore for Geftuo

Arial View of the koka Gold Mine Project in Eritrea
Arial View of the koka Gold Mine Project in Eritrea