Ethiopia-leaning media reports from Northeast Africa say that Ethiopian fighter jets bombed Nevsun’s Bisha copper/gold mine in Eritrea on Friday. Nevsun has dismissed damage to the Bisha plant as not serious and written it off so far as just an act of vandalism.
African media reports stated that Canada’s Nevsun’s highly profitable Bisha copper and gold/silver mine had been bombed by Ethiopian Air Force fighter jets – supposedly in retaliation for an Ethiopian helicopter being held by Eritrea. Nevsun itself has only commented so far that there was an ‘act of vandalism’ at the mine which caused no significant damage affecting only the base of a tailings thickener. this apparently took place during the night shift on Friday and released water into the plant area and that no-one was injured as a result. This leak is being repaired and plant operations, which had been shut down anyway for 10 days for a ball mill gearbox repair, would be back at full swing by the end of this week.
Nevsun’s 60% owned Bisha mine has been developed on a complex Volcanogenic massive sulphide (VMS) ore deposit carrying high grade gold/silver, copper and zinc. It is configured in three distinct layered zones – a 35 m thick surface high grade gold-silver oxide zone (mostly mined out by mid-2013) immediately overlying a copper enriched supergene zone (which is the current main source of plant feed) which itself overlies a primary sulphide zone containing both zinc and copper, and which remains open at depth. The sulphide zones contain lower grades of gold and silver too.
The operating plan started off with mining the gold/silver oxide cap and as mining became deeper it has now moved into the supergene enriched copper zone. Nevsun reckons this enriched copper zone makes it currently one of the world’s highest grade open pit copper mines. But as it mines through this copper zone it will eventually become primarily a high grade zinc and copper producer. Nevsun owns 60% of Bisha with the balance owned by the Eritrean state mining company (ENAMCO) which bought 30% from Nevsun and has fully participated financially in the mine’s development programme. The remaining 10% is a free carried government interest, also held by ENAMCO, in the project.
Initially processing the oxide ore cap, the mine produced low-cost gold-silver doré until mid-2013. Mill throughput has been expanded via a $110 million copper expansion project and is currently at 2.4 million tonne/year treating the supergene copper-rich ore and the main mine product has been switched to the production of copper concentrate. The next production phase will see flotation capacity expanded again in 2016 to produce zinc concentrates in addition to the copper concentrates from primary ore. The budget for this project is ca. $89 million, and will be fully funded from operating cash flow.
Eritrea gained its independence from Ethiopia in 1993, but there has ever since been a very tense relationship between the two countries which at one time spilled over into a border war and there have been numerous other border incidents. The Eritrean government is considered autocratic, even by African standards, but unlike most other African nations corruption is reported to be virtually nonexistent. Other mine developers and explorers operating in the country describe mining sector and government relationships as extremely positive, with a very supportive mine development policy and the country is considered a pretty safe environment in which to operate, as well as being seen as having great mineral potential for both precious and base metals.
The Bisha mine is a very significant (probably the biggest by far) contributor to the country’s GDP and could thus become a target for Ethiopian military action to destabilise the Eritrean economy of the type suggested, although is reasonably distant from the border. But it does appear that if there was indeed an attack by the Ethiopian Air force it was relatively minor, caused little damage and led to no casualties contrary to the media reports which suggested otherwise and reported smoke and flames visible from many miles away.
It does seem the media reports may well have been heavily exaggerated given Nevsun’s initial comments which are seen as more likely to be accurate as far as damage reporting is concerned. Whether this damage (or vandalism) was indeed caused by the Ethiopian Air Force will no doubt surface in due course as the mine and Eritrean security forces investigate the incident.