Sandfire Resources has awarded African Mining Services (AMS) the largest operational contract its Motheo copper project has seen, at the T3 pit in Botswana.
Earning $US496 million ($648 million) over seven years and three months, the Perenti surface mining business will perform open pit mining services for Sandfire.
Key factors in the contract tender process included the economic empowerment of local citizens, meaning AMS will form a 70/30 joint venture (JV) with a local business or businesses under the contract.
AMS already has a presence 200 kilometres away at the Khoemacau copper mine, which Sandfire managing director Karl Simich said was an important consideration.
“As one of the largest contract mining companies in Africa, AMS has vast experience working across the African continent, and with a strong focus on safety and sustainability, they represent a perfect fit with our organisation,” Simich said.
“By partnering with a group with deep roots and strong community and stakeholder relationships in Africa, we have a unique opportunity to work together to create a lasting, positive legacy in Botswana and deliver significant sustainability and ESG outcomes.”
A ramp up to site construction is expected over the coming weeks as receipt of the mining license is received.
The construction cost the project $279 million and will create at least 1000 jobs, according to Simich.
“The Motheo development will generate approximately 1000 jobs during construction and 600 full-time jobs during operations,” Simich said.
“We expect that at least 95 per cent of the workforce employed under this contract will be citizens of Botswana – a fantastic outcome for this new flagship project. “
This will provide a unique opportunity to leverage AMS’ existing state-of-the-art mining training centre in Maun, providing the local workforce with access to world-leading mining techniques and technology.
Perenti managing director Mark Norwell said this contract would transform the company’s presence in Botswana and aligned well with its growth strategy.
“Partnering with Sandfire is a great opportunity and collectively we share a strong commitment to the creation of shareholder value while demonstrating the highest standards of safety, responsibility and sustainability,” Norwell said.
“Growing our footprint in Botswana is aligned with our 2025 strategy, to further expand into stable mining jurisdictions and pursue quality projects.”
Upon mining commencement in 2022 and first production in early 2023, the Motheo mine will have an initial mine life of 12.5 years.
A definitive feasibility study outlined an ore reserve of 39.9 million tonnes at 0.9 per cent copper and 12.2 grams per tonne of silver.