Dundee Precious Metals (DPM) says it was prompted to divest from the Tsumeb smelter due to changes in the global smelting landscape.
The mining company acquired the smelter in 2010 to secure a reliable processing outlet for its complex concentrate from the Chelopech mine in Bulgaria.
However, according to Zebra Kasete, Vice President and Managing Director of DPM Tsumeb, evolving conditions in the global smelting sector have now made owning a smelter unnecessary.
“With the evolving market, accessing other smelters is now feasible, allowing DPM to focus on its core business: mining and exploration,” Kasete told The Brief.
“Therefore, we believe it’s the right time to find a buyer with the expertise to ensure the smelter’s long-term success, aligned with our strategic objectives.”
Kasete further stated that plans to seek a buyer with the requisite expertise to safeguard the smelter’s long-term viability in alignment with its strategic objectives are underway.
“DPM is a mining and exploration company and is focused on our primary business, which is mining and exploration. As a consequence, continued ownership of the Tsumeb smelter does not align with our long-term strategic plans. We therefore believe it is the right time to search for a buyer that has the needed expertise and will be a good steward for the facility’s long-term future,” he explained.
He acknowledged that while the decision to seek a new owner was challenging, it aligns with the company’s strategic plan and commitment to its primary business objectives, as DPM aims to prioritise its core focus on mining and exploration assets.
Kasete emphasised pride in their achievements in Namibia while highlighting the necessity of decisions consistent with their long-term goals.
“Our team and our investments in the smelter have helped transform it into a well-capitalized, efficient smelter with a world-class workforce. This is a unique asset that DPM believes will be of interest to a number of prospective buyers, and we, therefore, believe it is the right time to search for a buyer who has the expertise and who will be a good steward of the facility’s long-term future,” he said.
Known globally for its capability to process complex polymetallic concentrates, including those with elevated arsenic levels, the Tsumeb smelter is a significant asset. It produces blister copper (98.5% Cu) sent for refinement in Europe and Asia, along with sulphuric acid sold to third-party clients for application in uranium and copper mining.
The decision to undertake this review was outlined in the company’s 2023 Financial Results and Updated Three-Year Outlook, following Dundee’s acquisition of the Twin Hills Gold Project from Osino Resources in December 2023.
In the fourth quarter of 2023, the smelter processed 67,891 tonnes of complex copper, marking a 26,056-tonne increase from the corresponding period in 2022.
Throughout 2023, the smelter processed 188,803 tonnes of complex copper concentrate, up by 14,681 tonnes compared to 2022, primarily due to increased plant availability post-maintenance work in the third quarter of 2023.
The Tsumeb Smelter has a rich history, initially established by the Tsumeb Corporation Limited, a subsidiary of Newmont Mining Corporation, in 1962. Commissioned in 1963, the smelter served to process copper from Tsumeb Corporation’s mines, including the recently reopened Kombat mine.
Following Newmont’s divestment to Goldfields Namibia in 1988, subsequent declines in copper prices led to operational halts and eventual liquidation in 1998. Ongopolo Mining & Processing Limited took over Tsumeb Corporation’s assets, including the smelter, in 2000.
In 2006, Weatherly International acquired Ongopolo’s assets, later selling the smelter to Dundee Precious Metals in 2010 for US$33 million.
