The Namibian Custom Smelter ("NCS") is located in Tsumeb, Namibia approximately 430 km north of the capital, Windhoek.  Tsumeb is the closest town to the Etosha National Park and has a population of 14,000 people.  The smelter was constructed in the early 1960’s to process concentrate from the Tsumeb copper mine and is one of only five commercial-scale smelters in Africa.  It is linked by rail to the Atlantic port of Walvis Bay in Namibia.  The facility consists of two primary smelting furnaces, the old reverberatory furnace as well as the refurbished Ausmelt furnace and employs close to 600 people, including contractors.  

The smelter is one of only a few in the world which is able to treat arsenic and lead bearing copper concentrates and is therefore able to conclude long term favourable contracts to treat such concentrates.  Both blister copper and arsenic trioxide (As₂O₃) are produced from the concentrates.  The blister copper is delivered to refineries for final processing and the As₂O₃ is sold to third party customers.

Tsumeb Smelter has become a major custom smelter with brown-fields expansion potential. It produces blister copper (98.5% Cu) and has the ability to treat complex copper concentrates.

On March 24, 2010, DPM completed the acquisition of NCS, a metals processing and smelting operation (the “Smelter”) from Weatherly Mining International by way of the purchase of 100% of the shares of NCS. As part of the agreement to purchase NCS, the Company has been provided with an indemnification with respect to certain matters, such as any environmental and license breaches or breaches of law that may exist up to the date of completion of the acquisition of NCS, being March 24, 2010.

Louis Dreyfus Commodities Metals Suisse SA has exclusive rights to purchase the Chelopech concentrate for toll processing through the Smelter and an exclusive arrangement to further supply concentrate feed for toll processing at the Smelter through to and including 2020. The arsenic trioxide (“As₂O₃“) produced is sold to third party customers.

History

The Tsumeb Smelter Complex was built between 1961-1962 and commissioned in 1963 by Tsumeb Corporation Limited (TCL) under mining giant Newmont Mining. It featured an integrated copper and lead section (with refinery), and smaller plants that produced cadmium and arsenic trioxide as by-products. Production officially started on March 3, 1964. At that stage, the Smelter produced more than 3,500 tons of copper and 6,000 tons of lead per month. By 1986 the Smelter was also producing sodium antimonite for export.

In 1988, TCL was taken over by Gold Fields South Africa and administered by Gold Fields Namibia ("GFN"). Approximately six years later, the Lead Smelter was closed permanently. In July-August 1996, TCL’s mining and smelting operations came to a standstill due to a prolonged labour strike. This ultimately led to the closure and liquidation of GFN in 1998. 

In March 2000, Namibia’s High Court accepted an offer by Ongopolo Mining and Processing Limited ("OMPL") to take over GFN’s mines at Tsumeb, Kombat, Otjihase and Khusib Springs, as well as the Smelter complex in Tsumeb. From 2000-2008, only the Copper Section was operational; the Arsenic Plant was run on a small scale. 

In July 2006 Weatherly Mining International acquired OMPL. In December 2008 Weatherly suspended all mining operations because of a major decline in the world copper price and only kept the Tsumeb Smelter going. The Smelter was converted to a toll smelter at the beginning of 2009.

In March 2010, Weatherly sold the Smelter to Dundee Precious Metals Inc. for N$33 million in cash and shares with Weatherly retaining all mining assets.

Currently, half of the Smelter’s business comes from Dundee’s Chelopech mine in Bulgaria. Additional business is solicited from Peru, Greece, Russia, Poland and various African countries, such as Botswana and the Democratic Republic of Congo.

The Top-Submerged Lance (TSL) furnace is in full production. A new Oxygen Plant, commissioned in February 2010 to increase the efficiency of the TSL furnace, delivers 170 tonnes of oxygen per day and increased the capacity of the smelter dramatically from 120,000 tonnes of concentrate per year.  With a further increase of oxygen to the smelter planned over the next two years smelting should increase to approximately 240,000 tonnes of concentrate per year.