SOLWEZI, Zambia, Jun 14, 2011 (Dow Jones Commodities News via Comtex) -- Zambia's largest single copper mine by output, Kansanshi Copper Mines, is expected to lift annual copper output to at least 350,000 metric tons next year when it completes the first phase of its ongoing expansion project, a company executive said Tuesday.

Kansanshi, majority-owned by Toronto-listed First Quantum Minerals Ltd. (FQVLF, FM.T) is expected to invest at least $350 million in expansion projects at its operations in the next three years as it seeks to ramp up annual copper output to 400,000 tons by 2015, Sean Whittone, the mine's general manager, told Dow Jones Newswires.

"We are expanding the open pits to boost ores recoveries," he said, adding that the company is also refurbishing the Bwana Mkubwa Copper plant to enable it process copper produced from the mine.

Last year, Kansanshi produced 231,000 tons of copper.

The Bwana Mkubwa plant was closed last year after it run out of materials to process.

Located in the heart of Zambia's emerging mining frontier, the North Western province, Kansanshi has breathed a new life in Zambia's mining sector.

Since it started production in 2005, the mine has produced in excess of 1 million tons of copper, helping Zambia's copper output to hit a historic record production of around 820,000 tons last year.

According to Whittone, the company's cash flow has also been greatly boosted by the increased production of gold as a byproduct of copper at the mine. Gold now accounts for around 7% to 8% of the mine's total revenue, he said.

Last year Kansanshi earned a total of $115 million from gold sales. Gold revenue helps in keeping the production costs at Kansanshi low. At least 120,000 troy ounces of gold are produced annually at the mine.

With the mine's total resource reserves estimated at 384 million tons, grading at 1.1% copper and 0.76% gold, Kansanshi has a lifespan of at least 20 more years, Whittone further said.

When the mine started production, the Zambian government had given it a five-year tax holiday, however, within 18 months, First Quantum started paying taxes to the Zambian treasury after the mine become profitable, aided by improved copper recoveries as well as better global copper prices. Zambia is Africa's largest copper producer.