Ukraine war, shipping constraints delay completion of Oman copper project

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The Omani-Australian joint venture behind the development of a key copper-gold project in North Al Sharqiyah Governorate has announced a five-month delay in the scheduled completion of the venture to April 2023 from the original target date of around November 2022.

Al Hadeetha Resources LLC (AHRL) cited logistical impacts stemming from the Russian-Ukraine war, among other challenges, for delays in the timely delivery of its Al Wash-hi Majaza copper-gold project currently under implementation in the Wilayat of Al Mudhaibi.

Australian mining firm Alara Resources Limited has a 51-per cent stake in the joint venture, while the remaining 49 per cent is owned by Omani investors Al Hadeetha and Tasnim. In 2018, the partnership became the first international joint venture company to be awarded a copper mining licence in the Sultanate of Oman.

In its latest update on the implementation of the project, AHRL listed a number of factors, aggravated by challenges linked to the outbreak of hostilities between Russia and Ukraine, for the revision in the timeframe for the completion of the landmark venture.

“In light of logistical challenges associated with the Ukraine war, constrained shipping availability and delayed project engineering a project schedule review was conducted by the AHRL Project Management Consultant. The review determined that previously reported project completion in November 2022 is no longer achievable. The revised completion date determined by the Schedule Review is April 25, 2023, with mechanical completion of plant to occur by February 25, 2023,” the JV said in a press statement.

Among the factors contributing to the deferred schedule is the “deterioration in the shipping market due to a new Covid lockdown and the Ukraine war, causing low availability of containers and sea transport from all world ports,” it said. Additionally, the Ukraine conflict is “impacting availability and prices of key project components, prolonging order placement negotiations”, the company further noted.

On the ground, however, key works linked to the development of the mine site are making headway, according to the company. Some of the equipment packages have already arrived at site. Work is also progressing on the removal of the overburden to allow for the actual mining of the copper ore, located below ground, to be extracted.

Significantly, the Wash-hi Majaza copper deposit has been evaluated to hold over 16 million tonnes of copper resources and 10 million tonnes of mineable reserves. When operational, the project has the potential to generate cash flows of RO 200 million for a period of 10 years.

Alara Managing Director Atmavireshwar Sthapak added: “We are delighted with the pace at which the Al Hadeetha JV team is powering through the development phase of our 51 per cent-owned Al Wash-hi Majaza Copper-Gold Project. There is little slippage in project completion schedule, however efforts are being made to prevent further delays. Bulk earth works central to the Project’s initial plant and infrastructure construction activities are now well underway and on schedule, while key pieces of equipment critical to the operation of the mine have begun to arrive this month. The mine pit itself is also taking shape, with pre-stripping now significantly advanced. We look forward to providing the market with further updates on the project over the months ahead, as it moves ever closer to revenue-generating production.”