Approval nears for zinc project

28 October 2005
UK-based ZincOxis close to finalising an agreement with the Ministry of Oil & Mineral Resources to exploit the Jabali zinc deposit, 110 kilometres northeast of Sanaa. A consortium led by ZincOx completed a feasibility study into the project in March, which estimated potential production at 800,000 tonnes a year (t/y) of ore and 70,000 t/y of zinc oxide over a mine life of 12 years.

If the exploitation plan receives initial approval from the ministry, it will go to the cabinet and parliament for the final go-ahead. Capital costs are estimated at $70 million and the project is likely to be funded on a 60:40 debt/equity basis. South Africa's Export Credit Insurance Corporation has already been approached about providing coverage and discussions have been conducted with potential financial advisers.

ZincOx owns 60 per cent of the consortium that has exploration rights to the deposit, with the remainder split equally between South Africa-based Anglo-American Corporation and the local Ansan Wikfs.Sanaa is working to develop the minerals industry as part of diversification plans and in mid-2004 appointed the UK's Scott Wilson - which also carried out an environmental impact assessment on the zinc project - to conduct a feasibility study into a gold mining project in the Jabali area (MEED 14:5:05).

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