Page 1

470mtpa: quantity of CO2 SA releases

$32-million: Capex for Lindi Jumbo project


READ WHAT REALLY GOES DOWN IN SADC R39.90 (incl VAT) International R44.50 (excl tax)

Thungela Resources CEO July Ndlovu

MENAR DIVERSIFIES Develops East Manganese


Unpacking the impact of the draft regulation


In the starting blocks

CLEAN COAL TECHNOLOGY Thungela calls for adoption

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28 8

Gold continues to shine.


Arnot CopCo inks 10-year coal supply agreement with Eskom Master Drilling acquires stake in A&R Group Unemployment hits record high of 34.4% Neal Froneman awarded Brigadier Stokes award

Commodity prices a buoy for SA’s mining industry.



Lindi Jumbo in the starting blocks Walkabout Resources is counting down the months to getting its Lindi Jumbo Graphite project into production.


Banking’s role in mining’s energy transition ESG concerns from shareholders, rating agencies and regulators are soaring, says RMB’s Henk de Hoop.


Impact of draft regulations of Geoscience Act on exploration companies AngloGold Ashanti’s Aviona Mabaso unpacks how the draft regulations to the Geoscience Act could impact exploration companies.

Kal Tire at the forefront of customer service and innovation. 470mtpa: quantity of CO2 SA releases

Kal Tire at the forefront of innovation Customers’ focus on ESG is driving investment and development in innovation and technology, says Kal Tire’s John Martin.

12 16

470mtpa: quantity of CO2 SA releases $32-million: Capex for Lindi Jumbo project

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$32-million: Capex for Lindi Jumbo project



Menar develops East Manganese As part of its diversification strategy, Menar has developed its East Manganese operation, which ramps up to nameplate capacity in September, COO Kobus Rothmann tells SA Mining.



Out of Africa Column by Peter Major


Thungela Resources CEO July Ndlovu

Develops East Manganese



In the starting blocks

Unpacking the impact of the draft regulation

CLEAN COAL TECHNOLOGY Thungela calls for adoption


The coal industry value chain must push for the deployment of clean coal technologies to lower carbon emissions, says Thungela Resources CEO July Ndlovu. To visit our website.







Nelendhre Moodley Tel: 011 280 5782 Email: Stacey Visser Tel: 011 280 3671 Email:


he Intergovernmental Panel on Climate Change’s latest assessment report states that human influence has resulted in “widespread and rapid changes in the atmosphere, ocean, cryosphere and biosphere”. This impact of global warming has extended to the financial industry, with the sector seeing a strong surge in environmental, social and corporate governance-related questions and concerns from shareholders, clients and rating agencies, among others, says RMB’s Henk de Hoop. “We expect that transparent reporting on transition plans and the emissions footprint will be expected soon from all large entities wishing to borrow in the capital markets … Where previously the rising cost and reliability of Eskom power was the main investment rationale, now corporate emission reduction targets have made renewables a ‘no brainer’ investment proposition.” (See pg 22) The good news is that South Africa is heeding the call for the speedy adoption of green energy solutions, with the National Electricity Regulator of South Africa giving the Department of Mineral Resources and Energy (DMRE) the nod for the procurement of new nuclear energy generation. The DMRE is looking to procure 2 500MW from the Nuclear New Build Power Programme and believes that the timeframe of construction and connection to the electricity grid to ensure the continued security of supply will come into play in line with the planned decommissioning of the coal power plant fleet (24 100MW) post-2030. Further to this, the department recently published the bids for the development of renewables in the bid window 5 of the Renewable Energy Independent Power Producer Procurement Programme. Of the 102 projects submitted, 63 are for solar PV plants and 39 for onshore wind projects. Moreover, following government gazetting new rules that allow licence exemptions for generation facilities of up to 100MW, the mining industry has been quick to adopt renewables, with Gold Fields’ South Deep mine pioneering the way. And in an interesting move, local power producer Eskom is offering consumers the option to purchase green power and has initiated a pilot programme in this regard. “The Renewable Energy Tariff is designed to provide a cost-effective and flexible option for Eskom customers to consume renewable power” and meet their own targets. This enables customers



Nelendhre Moodley




to source a blended electricity supply with up to 100% of their electricity from one of the utility’s renewable sources, the power utility said. Eskom generates green power from some of its renewable electricity plants such as the Sere Wind Farm and run-of-river hydro facilities. During the period of the pilot programme, Eskom offered a maximum of 300GWh per annum to customers supplied directly by Eskom, on a first-come-firstserved basis. Eskom’s Renewable Energy Tariff pilot programme is scheduled to last for a two-year period ending 31 March 2023. As the call for the adoption of clean energy grows louder, coal miners are jumping on the bandwagon to “as far as possible” clean up coal’s “dirty” image. The coal industry is driving the agenda for the deployment of clean coal technologies. And while it may seem that the fast-track to green energy is eroding the importance of coal as an energy source, think again. The demand for coal remains robust with appetite from countries in the Far East driving demand. In our cover story, Thungela Resources’ CEO July Ndlovu, who also holds the position of chairman of the World Coal Association, is pushing for power generators to adapt their power stations to be highefficiency-low-emission power producers, following in the footsteps of Asian economies. Aside from high-efficiency-low-emission technologies, Ndlovu flags the benefits of carbon capture and storage initiatives (CCS), including those of the new CCS pilot project being rolled out in Mpumalanga province which will help limit CO2 emissions (see pg 12). CCS involves capturing carbon emissions and storing it underground. Interestingly, coal miner Menar is busy rolling out its geographical and commodity diversity strategy and recently expanded its portfolio to include manganese. The company has established a test case through its East Manganese operation in the Northern Cape and produced first ore at the end of August, ramping up to nameplate capacity of 30 000 tonnes a month of ore by September (pg 30). Speaking of energy-related commodities, Walkabout Resources is eager to get its Lindi graphite project off the ground and has already secured the required finance, awarded contracts and sourced long-lead items. The company is looking to become a producer by as early as the first half of next year (see pg 16). ■

Shailendra Bhagwandin Tel: 011 280 5946 Email:


Ilonka Moolman Tel: 011 280 3120 Email: Tshepo Monyamane Tel: 011 280 3110 Email:


Gail Mortinson Tel: 011 280 5369 Fax: 011 328 2226 Email:

SUB-EDITOR Andrea Bryce


Claire Morgan Tel: 011 280 5783 Email:



Tel: 011 280 3000


Gail Mortinson Tel: 011 280 5369 Email:


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TSX-listed Giyani Metals has advised that an infill drill programme at its K.Hill Project feasibility study in Botswana has resulted in the discovery of a new mineralised horizon located below the main ore body. This is being assessed for inclusion into the upcoming mineral resource and reserve statement, the company says. Further to this, an induced polarisation survey at the Otse manganese prospect has identified several geophysical anomalies, which will define target locations for a 3 000m drilling campaign, which will commence shortly.


Recent drill results from gold explorer Mako Gold include the highest ever single-metre assay reported for Lodes 2 and 3 of the Tchaga Prospect, the company says. The Tchaga Prospect forms part of the company’s flagship Napié Project in Côte d’Ivoire, where it continues to grow the footprint of the mineralised zone. The current drill results have increased the width of Lodes 2 and 3 to more than 300m. All 21 drill holes from this announcement have reported significant gold mineralisation, which indicates widespread gold mineralisation at Tchaga. Mako’s managing director Peter Ledwidge says: “The Tchaga Prospect has delivered the highest single-metre assay of 1m at 174.60g/t Au within a broader high-grade mineralised zone in oxide, which confirms the continuity of mineralisation between the oxide zone and fresh rock.”


UGANDA ASX-listed Ionic Rare Earths has approved an increase to the planned infill drilling at its 51%-owned Makuutu Rare Earths Project in Uganda. Due to accelerated progress at Makuutu, a further 2 100m have been added to the Phase 4 drill programme, increasing the overall programme to 7 800m. Makuutu has been confirmed as one of the world’s largest-scale ionic adsorption clay hosted rare earth element deposits. The Phase 4 drill programme is part of the targeted work programme to increase the mineral resource estimation classification at Makuutu, planned for Q1 2022.

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ASX-listed Prospect Resources has identified two significantly sized rare earth element (REE) anomalies at its Chishanya Carbonatite Project in south-eastern Zimbabwe. The deposit was a known source of apatite hosted phosphate but was previously untested for REE, the company says. Prospect Resources managing director Sam Hosack says: “We are excited by the soil sampling results as an initial indication of Chishanya’s potential to be a rare earth element project. Based on these results, we have exercised the option on the adjoining ground to bulk up the project with a view to undertake further exploration and evaluation.”

West African gold explorer and developer Sarama Resources has been issued with an exploration permit for the Djarkadougou II, which covers 169km2 and hosts the highgrade Bondi Deposit and several high-quality exploration targets. The exploration permit is valid for an initial term of three years and is renewable for a further two three-year terms. The Bondi Deposit is located within trucking distance of Sarama’s 100%-owned Tankoro Deposit and adds a substantial amount of high-grade and free-milling material to the development proposition. Sarama’s CEO Andrew Dinning says: “With the reissue of Djarkadougou ll and good progress being made on the permit reissue process in Burkina Faso, we have taken the decision to recommence the ASX listing process.”




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South Africa posted record-high unemployment rates in the second quarter of 2021 as the formal sector cut 375 000 jobs, according to Statistics South Africa. Official unemployment is at an all-time high of 34.4% with 7.8 million people out of work on the narrow definition and a 44% unemployment rate on the expanded definition. Roger Baxter, CEO of the Minerals Council, noted that: “Mining and related sectors can materially grow investment, production, exports and value creation for the country, through continued collaboration on critical reforms that will unlock this investment.”

Mining giant Neal Froneman has been honoured with the 2021 Brigadier Stokes award by the Southern African Institute of Mining and Metallurgy, considered the highest distinction to be bestowed by the South African mining and metallurgical sector. Froneman has spent the past eight years transforming Sibanye-Stillwater from a 1.5moz South Africa-based gold producer into a leading precious metals miner with an international operating footprint ranking among the world’s top three PGM producers. The Brigadier Stokes Memorial Award was instituted in 1980 in commemoration of the outstanding contribution that Brigadier R.S.G. Stokes made to the South African mining and metallurgical industries over many years.



South African coal mining company Arnot OpCo has entered into a long-term coal supply agreement (CSA) with Eskom to provide coal for the next 10 years from its Middelburgbased mine. The signing of the agreement is a big boost for the mining company, its ex-employees, and Middelburg’s neighbouring community, where it operates. Bontle Aphane, Arnot OpCo’s CEO, said: “Before Arnot mine was shut down, it had been the primary source of income for many in this area. With this significant CSA signing, we plan to hire more people from the community, as well as exemployees – improving their economic prospects again and increasing our staff complement.”

Drilling services company Master Drilling Group has announced an initial 25% investment in A&R Group. According to Master Drilling, over the years A&R Engineering & Mining Supplies has become a leading operator in the underground rail bound and trackless equipment hardware environment in terms of management systems and focusing on safety solutions. Danie Pretorius, Master Drilling CEO, says: “Investing in A&R is synergistic for Master Drilling and aligned with our strategy to diversify our services and invest in businesses that help us meet our clients’ demand for increased mechanisation and digitisation.”


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Astron Energy, South Africa’s second largest petroleum network, has initiated the process to rebrand all Caltex-branded service stations to Astron Energy. The existing network of over 850 Caltex service stations in South Africa and Botswana will be rebranded in a phased manner over the next few years, says the company. The name change follows the 2018 majority acquisition of the former Chevron South Africa by Glencore South Africa Oil Investments, since which time Astron Energy has been operating the Caltex brand under a licence agreement.

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he World Gold Council plays an important role in increasing recognition for the precious metal, and aside from stimulating demand for gold, it provides industry leadership and is the authority on the gold market. SA Mining recently caught up with Krishan Gopaul, senior analyst, Europe, Middle East and Africa, at the World Gold Council, to chat about the impact of current events on the commodity.

HOW HAVE GLOBAL EVENTS INFLUENCED YOUR STRATEGY FOR THE NEXT TWO YEARS? The pandemic has changed our approach – as it has for all organisations. But our wider strategy has not changed. We believe the gold market needs to be more accessible, it needs to earn ever more trust with market players, and gold needs to be ever more fungible. The World Gold Council continues to work towards these aims.


Gold is unusual in having a dual nature as both a consumer good and an investment asset, so the factors driving demand are complex. Gold demand [has been] fairly balanced during the pandemic, with different



sectors reacting differently to the economic environment. The heightened risk and uncertainty caused by the pandemic was a significant driver of gold investment demand in 2020, leading to record annual inflows into gold exchange traded funds, while the negative economic impact of the virus and associated lockdowns were a drag on pro-cyclical elements of demand like jewellery. Gold supply too was impacted, as lockdowns and travel restrictions caused some mining projects to suspend operations temporarily. Gold demand has been well supported by recovering global economic growth but the outlook remains somewhat uncertain.


Africa’s mine production has increased over the past five years, from 865t in 2016 to 931t in 2020, with broad growth in a number of countries across the continent. During this time, Ghana also became Africa’s largest gold-producing nation in 2018, overtaking South Africa where production has been in decline for a number of years. West Africa has become a significant gold mining region, with the top seven producing countries


adding a combined 451t to global gold production in 2020 (48% of Africa’s annual production).

WHICH ARE THE TOP 10 GOLDPRODUCING AREAS IN AFRICA, AND WHAT IS THEIR ANNUAL PRODUCTION? Ghana has surpassed South Africa as a leading gold producer, with Mali, Burkina Faso and Sudan ranking among the top producers in Africa.

COUNTRY TONNES ■ Ghana 138.7 ■ South Africa 99.2 ■ Mali 93.8 ■ Burkina Faso 93.4 ■ Sudan 83.8 ■ Democratic Republic of the Congo 60.9 ■ Guinea 56.9 ■ Tanzania 45.9 ■ Côte d’Ivoire 41.9 ■ Zimbabwe 40.9

HOW IS THE USE OF GOLD EVOLVING, AND HAVE THERE BEEN ANY NEW USES FOR GOLD OVER THE RECENT PAST? Today, the unique properties of gold and the advent of nanotechnology are driving new uses in medicine, engineering and environmental management.

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GOLD PRODUCTION IN 2020 At a country level, China was the largest producer in the world in 2020 and accounted for around 11% of total global production. COUNTRY

For example, gold wires are the backbone of the internet and layers of gold help NASA protect its astronauts and equipment from radiation and heat. Gold can be used to build highly targeted methods for delivering drugs into the human body, to create conducting plastics and specialised pigments, or advanced catalysts that can purify water or air. Gold nanoparticles are at the heart of the hundreds of millions of rapid diagnostic tests (RDTs) that are used globally every year. This well-established and critically important technology has changed the face of disease diagnosis in the developing world over the past decade. Gold-based drugs have been developed and used to treat illnesses such as

rheumatoid arthritis. Research is currently ongoing into the role that gold can play in cancer treatment. Gold nanoparticles are also being used to improve the efficiency of solar cells, and gold-based materials are showing promise in the search for new, more effective fuel cell catalysts. Groundwater contamination is a common problem around the world in industrialised areas, and another innovative use of gold is helping break down contaminants into their component parts. Although most technological applications use low volumes of gold, their impacts are very diverse and widereaching. ■


368.3 331.1 327.8 190.2 170.6 138.7 107.0 101.6 101.6 100.9 99.2 97.8 93.8 93.4 83.8 78.4 60.9 56.9 53.6 53.1 45.9 42.0 41.9 40.9 36.7 33.4 32.1 29.8 28.3 25.4 24.3 20.2 18.2 15.8 15.6 14.1 13.5 10.5 10.0 8.9 8.8 8.7 8.2 5.5

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The heightened risk and uncertainty caused by the pandemic was a significant driver of gold investment demand in 2020. – Gopaul

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■ China ■ Russian Federation ■ Australia ■ United States ■ Canada ■ Ghana ■ Brazil ■ Uzbekistan ■ Mexico ■ Indonesia ■ South Africa ■ Peru ■ Mali ■ Burkina Faso ■ Sudan ■ Kazakhstan ■ Democratic Republic of the Congo ■ Guinea ■ Colombia ■ Papua New Guinea ■ Tanzania ■ Turkey ■ Côte d’Ivoire ■ Zimbabwe ■ Argentina ■ Venezuela ■ Chile ■ Suriname ■ Dominican Republic ■ Philippines ■ Kyrgyz Republic ■ Mongolia ■ Guyana ■ Senegal ■ Mauritania ■ Egypt ■ Ecuador ■ Iran ■ Ethiopia ■ Nicaragua ■ Namibia ■ Finland ■ Sweden ■ New Zealand






Isabella Kobela and Meiki Ngcengeni.

JSE-listed DRDGOLD’s subsidiary Ergo Mining has begun reclamation – at a R3.8million set-up cost – of the 2.7mt 4L25 mine dump. The reclamation of this dump is integral to sustaining production at Ergo and will free up a considerable land patch, says the company. The dump is within the 4A8 reclamation area, close to Johannesburg’s central business district. With an average grade of 0.308g/t, the 4L25 dump is estimated to contain some 850kg of gold. 4L25 slimes will be recovered at a rate of up to 300 000tpm over a period of 10 to 12 months, with supplemental tonnage coming from the 4L2 dump, reclamation of which is ramping down. This will sustain City Deep’s production levels for a further 12 months until the larger 4L3 and 4L4 reclamation sites begin. 4L25 slimes will be reclaimed by a remote-controlled high-pressure water gun positioned on top of the dump. It will be combined with 4L2 slimes, and then pumped via a 40km pipeline to Ergo’s metallurgical plant at Brakpan for gold recovery. Besides sustaining City Deep’s production for longer, 4L25’s reclamation forms part of the extensive land rehabilitation programme DRDGOLD is executing under its “rolling back gold mining’s environmental legacy” banner. The partially reclaimed dump will be removed completely to liberate some 37ha of land for rehabilitation and sustainable land use.





EYES NEW OPPORTUNITIES East Rand-based company Isabella Jewellers and Refiners – the brainchild of Isabella Kobela, who trained in goldsmithing and rough diamond evaluation – says that despite the challenges posed by COVID-19, the company remains upbeat about the future. The company manufactures and sells jewellery to the industry, runs a successful refining and recycling operation, provides wholesalers with raw materials and designs and sells custom-made pieces to individuals. Following the onset of the pandemic, the jewellery manufacturing side of the business has taken a hit, as many customers postponed weddings and put big-ticket purchases on the back burner. In October last year, Isabella Jewellers and Refiners joined the De Beers Enterprise Development Project, and were provided with tools and techniques to structure processes and systems to generate sustainable growth. “Thankfully the business-to-business sales have remained strong, and kept the Isabella Jewellers ship afloat through the COVID-19 storm. We continue to identify hidden opportunities by using the capacity of resources we have in place to be innovative and develop approaches that will keep us sustainable,” says Kobela. She is joined by her daughter Meiki Ngcengeni in the business. “One of my areas of interest is compliance, which is really important in this industry. You need to have specific licences for every aspect of your operations: a refining licence for smelting and refining, a precious metal beneficiation licence for fabrication, a jeweller’s permit to be able to manufacture jewellery, and archiving the Responsible Jewellery Council certification was one of the greatest milestones for our company,” says Ngcengeni.

We’re proud of our rich past and together we are ready to take the mining industry where we’ve always been headed: FORWARD.



CLEAN COAL TECHNOLOGY Thungela calls for adoption By Nelendhre Moodley




Thungela exports 16.5mtpa of coal.

he coal industry value chain must unite and push for the deployment of clean coal technologies to lower carbon emissions. This will ensure that we do what is right not only for the country but also for the climate, Thungela Resources CEO July Ndlovu tells SA Mining. The pure-play coal exporter, a spinoff from Anglo American’s South African thermal coal assets, produces some 16.5 million tonnes of thermal coal per annum for off-shore markets. The company mines from seven collieries in Mpumalanga, namely Goedehoop, Greenside, Isibonelo, Khwezela, Zibulo, Mafube and Rietvlei. Thungela’s operations are among the highest-quality thermal coal mines in South Africa by calorific value. “The world needs coal, both as an energy source and as a conduit to economic progress and modernisation. It is the backbone of our infrastructure needs as it is used in steel-making and in the production of cement and aluminium. Given that it is the cheapest and most affordable source of energy, demand for coal remains robust.” Ndlovu, who also wears the cap of chairperson of the World Coal Association (WCA), says both the WCA and the International Centre for Sustainable Coal are driving the agenda for investment in clean coal technologies – be it carbon capture and storage (CCS) which has been identified as part of the broader suite of interventions in mitigating global warming, or high-efficiency technologies. CCS involves capturing carbon emissions from industrial activity, including power generation, and then transporting it to be kept underground.

Implementing technology improvements on traditional power stations can slash CO2 emissions by roughly two gigatonnes. – Ndlovu More recently though, South Africa initiated geological mapping of the country’s first carbon capture and storage site and started construction of its first CCS facility – a pilot plant located in Leandra in the north-east of the country, which is scheduled to come on-stream in 2023. It is estimated that South Africa releases about 470 million tonnes of carbon dioxide (CO2) a year. Aside from CCS, Ndlovu flags the adoption of high-efficiency-low-emission power plants. “If you take the Far East which is where we export the bulk of our coal to, you will notice that countries such as China are deploying high-efficiency-low-emission coal power stations that are about 48% more efficient when compared to non HELE plants with an efficiency of 35%. “As it stands, China is busy


commissioning 15 high-efficiency-lowemission power plants that will deliver 36GW of power. Japan is also following suit and commissioning three such plants. “Implementing technology improvements on traditional power stations can slash CO2 emissions by roughly two gigatonnes,” says Ndlovu. Further to this, China announced that it would be building another 43 thermal coal power stations (equivalent to demand of about 400mt of coal) over the next few years; with India, Pakistan and Bangladesh also gearing up to build more coal-fired power plants. According to Ndlovu, although the Far East as a region accounts for roughly 50% of the world’s population, it has limited access to modern energy and services, and as such is busy fast-tracking power station > development.

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A leading South African coal export company.




The clean coal technology advocate also remains focused on its environmental, social and corporate governance (ESG) agenda, targeting water reduction, bio diversity, land management and land stewardship. The miner is undertaking groundbreaking initiatives around its operations in Mpumalanga, which include returning mined land to its previous state and working with researchers Coaltech and the University of Pretoria to introduce naturally occurring bacteria to help convert mined discard to top soil – this will help in re-establishing natural grazing land. Thungela is also working to restore the fauna and flora in wetland intervention areas, including reinstating some species of flora that are found neighbouring to its Isibonelo and Mafube Collieries, and treating mine-polluted water to drinkable level. The treated water is reused at its operations and shared with the eMalahleni community. “We believe that there are cost-effective solutions for our water challenges that are applicable to not just the coal fields but also to the Witwatersrand basin where acid mine drainage is a major challenge.” Meanwhile, as part of its commitment to fostering ESG, the Johannesburg- and London-listed entity has established an employee partnership plan and a community partnership plan, which each hold a 5% interest in Thungela’s subsidiary, South Africa Coal Operations. The plans enable employees and communities to share financially in the value generated by the company’s thermal coal operations. The first distribution of R6-million to the community partnership plan was made on 30 June 2021.



“ The world needs coal, both as an energy source and as a conduit to economic progress and modernisation. – Ndlovu

Thungela mines from seven collieries in Mpumalanga.


Over the short term Thungela’s growth initiatives are focused, among others, on expansion plans at its flagship Zibulo project, in unlocking value from its Elders project through the use of existing infrastructure at its Goedehoop operation, ramping up its Navigation mine and seeking out solutions for the bottlenecks at its Goedehoop and Mafube mines.


“As a pure-play export business, we want to make sure that the assets we have are delivering to their full potential and adding value to our portfolio. As it stands, we don’t need to make any major investment decisions over the next two years, which allows us time to revisit some of our more structured projects to establish how best to sequence them to unlock greater value.” ■



According to the Council for Scientific and Industrial Research’s (CSIR) recently released half-year update of power generation, coal continues to dominate the South African energy mix. It contributed 81.8% to the national energy mix in H1-2021 as an additional coal unit at Kusile power station entered into commercial operation. The contribution from renewable energy sources totalled almost 11% (solar PV, wind, hydro, concentrating solar power (CSP), and others) while zero-carbon energy sources contributed 14.3% (renewables and nuclear). The H1-2021 statistics showed that system demand increased by 5% in H1-2021 relative to H1-2020, but was 2.2% lower than H1-2019. South Africa unfortunately experienced load shedding for 650 hours in H1-2021 (15% of the time) wherein 963GWh of estimated energy was shed (mostly stage 2 load shedding). This is 76% of the total load shedding experienced during 2020, the council said. The extent of load shedding experienced was largely driven by a declining energy availability factor (EAF) of the existing coal fleet, where overall the EAF was 61.3% for H1-2021 (relative to 65% in 2020 and 66.9% in 2019). A concerning shift of the unplanned outage component of the EAF has also been highlighted where unplanned outages of up to 15 300MW were experienced and were greater than 10 000MW for more than 80% of H1-2021.

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Engen continues to expand in the Democratic Republic of the Congo (DRC) and so spread its retail fuel and convenience customer experience across the country, with the recent opening of two new Engen service stations, says the company. “As always, convenience and customer service are key determinants of our success and we are excited to bring these two new service stations to market,” says Charles Nikobasa, MD of Engen in the DRC.  Engen currently operates 67 service stations across the DRC, as well as two fuel depots and two lubricants depots. “The launch of these two new sites – Engen FS Kauka and Engen FS Pompage – is an affirmation of the continued prospects for growth in the country,” says Nikobasa.  Both Engen FS Kauka and Engen FS Pompage offer Engen Primax Unleaded 93/95, Engen Dynamic Diesel 50ppm and Engen and PETRONAS lubricants products.  Drikus Kotze, general manager of Engen’s commercial and international business division, says since entering the DRC in 2007 when it purchased 60% of Shell en RDC, Engen has been growing steadily in the country.  “The DRC is an integral part of Engen’s growth ambitions and we’ve been aggressive in our retail rollout over the past decade. Today we operate 67 service stations, two fuel depots and two lubricants plants.” Engen operates a retail network of 230+ service stations in six countries, namely Botswana, DRC, eSwatini, Lesotho, Mauritius and Namibia, as well as a further 1 000-plus sites in South Africa.









owned processing and plant manufacturing company, has completed construction of a significant portion of the long lead items. “Aside from procuring and manufacturing about $1-million worth of equipment and progressing work onsite, we have been engaging the local community in a bid to garner buy-in as well as educate the community on what to expect when the project comes online,” says Cunningham. Once operational, the project will employ over 100 people, with the vast majority of workers recruited locally. Walkabout Resources is also advancing community upliftment programmes and helping the local community acquire a 5% stake in the

project – a prerequisite of the Tanzanian government aimed at directly benefiting the local community. “Together with the district authorities and the local villagers, Walkabout Resources is assisting in setting up a trust to help locals acquire the 5% stake in the project. This will give community members direct access to dividends which will go a long way in uplifting the local community,” says Cunningham.


The global demand for graphite is being driven primarily by the battery or energy


recent report by the World Bank flags developments in energy storage technology as a catalyst driving demand for high-impact minerals such as graphite, lithium and cobalt. Mineral producers will need to increase production by up to some 500% by 2050 from 2018 levels, the report states. For African-focused energy minerals developer Walkabout Resources, which is counting down the months to getting its Tanzanian Lindi Jumbo Graphite Project into production, this is great news. The emerging miner has already secured the required finance, awarded contracts and sourced long-lead items, CEO Andrew Cunningham tells SA Mining in an exclusive interview. The ASX-listed company, which recently secured the requisite $32-million capex for its Lindi Jumbo Project, is looking to be a producer by as early as the first half of next year. “Following legislative changes to the Tanzanian mining sector in 2017, this is the first new large-scale mining project being developed in the past five years,” says Cunningham. Local contractor TNR Engineering has been appointed to undertake site preparation, and in a bid to de-risk project timelines, the company has completed much of the early onsite work. Its engineering, procurement and construction partner in China, Jinpeng Mining Machinery, a privately

Graphite and lithium production needs to ramp up by 500% by 2050 to meet 2DS demand. – World Bank report Benching plant area.


USES OF GRAPHITE Graphite is used in traditional industries including refractory and foundry, expandable graphite, carburisation, graphite shapes and lubricants. However with the global focus on clean energy, there is a focus on the battery and electric vehicle market.

Processing plant area.

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Capex secured for Lindi Jumbo project storage and the electric vehicle (EV) market, which is currently pocketing much of the graphite away from the traditional markets. According to the World Bank’s recent report Minerals for Climate Action: The Mineral Intensity of the Clean Energy Transition, high-impact minerals such as graphite, lithium and cobalt will need to increase their production significantly to meet demand. “Most of this demand will come specifically from energy storage technologies. It could also carry supply risks, as more than 60% of graphite and cobalt production are concentrated in China and the Democratic Republic of the Congo respectively. “Concentrated minerals such as lithium, graphite and cobalt are needed only for one or two technologies, and therefore possess higher demand uncertainty as technological disruption and deployment could significantly impact their demand. “Graphite and lithium demand are so high that current production would need to ramp up by nearly 500% by 2050 under a twodegree scenario (2DS) just to meet demand,” the report says.

With graphite demand outstripping supply, expectations are that graphite projects will begin to mushroom in the short term. According to Cunningham, although China, the dominant producer of graphite, is able to increase production of graphite as and when required, given its massive graphite deposits, environmental issues have forced a number of China’s long-standing larger flake mines (operating for over 50 years) to close down. “This has resulted in a large flake graphite market shortfall. Interestingly, this shortfall was only forecast to come into effect in 2024. With demand for graphite growing faster than predicted three to four years ago, this is good news for the Lindi Jumbo Project.” With China dominating the small flake graphite market, East Africa is emerging as a prominent producer of natural graphite with high-quality large flake graphite deposits in the mix. “Lindi Jumbo is an exceptional project in the graphite space, as it has a very high reserve grade of around 18% total graphitic carbon (TGC) and with most of the flake in high-grade concentrate of >95% TGC

concentrate above 180 microns – making it one of the highest margin graphite projects globally. The Lindi Jumbo natural flake graphite concentrate is suitable for a wide variety of the end-use markets. “The project is thus not solely focused on supplying product to the renewable and battery storage market – in fact, only a quarter of our product will possibly be sold into this market. Our major focus (large flake size above 180 microns) is earmarked for the expandable graphite, graphite foils, flame retardants and speciality product markets with the larger flakes also highly desirable in the graphene industry.” He says it’s important to note that irrespective of whether one sells graphite to the clean energy (battery market) or the traditional small flake markets, the sales price for the same concentrate grade remains the same. “Larger flakes demand a premium price and with the majority of our product in this category, and with demand for graphite soaring, it is certainly a favourable time to be entering the market.” Discussing government support for > the Lindi Jumbo Project, Cunningham





Walkabout Resources has secured three offtake agreements with Chinese companies, for planned production of 40 000tpa. – Cunningham

© ISTOCK – Ocskaymark

says Walkabout Resources has received “tremendous support” from the Tanzanian government. “Aside from the local government being keen to see this project come into production, the investment world is also watching as the Lindi Jumbo graphite project is the first project to receive direct foreign investment to develop a mine in Tanzania in recent times. “We believe that on the back of the success of the Lindi Jumbo graphite project there is going to be an influx of other project developers looking to unlock further opportunity in the country.”


Walkabout Resources has secured three offtake agreements with Chinese companies, “more or less covering the project’s entire planned production of 40 000tpa”. “Given that we specifically didn’t want to offload our entire production to a single entity or country, we set out our agreements to contain options for minimum and maximum amounts. “This enables us to court other potential buyers, including those in Europe and the United States. We already have a marketing agreement with a global company based in Hong Kong, which has been actively marketing our product.”

Walkabout Resources also has in place a memorandum of understanding with a German graphite trading company.


The restriction of movement associated with the COVID-19 pandemic continues to adversely impact the development of projects in remote locations given that highly skilled personnel are reluctant to work outside their home countries. “This means getting new projects off the

ground is a challenge. Fortunately, given that Tanzania is a well-established mining destination, it is sufficiently equipped with skilled people.” Another key challenge, says Cunningham, is the recent shortage of shipping containers. “This has become a massive challenge over the past year, with the cost of containers skyrocketing. In fact, shipping costs rose over 600% in the past year. We are looking into how to mitigate that, but that is a challenge everyone is facing.” n

AECI DELIVERS VIRTUAL SUPPORT Given explosives manufacturer AECI Mining’s focus on innovation, the solutions provider has been able to help a client operating in West Africa who was experiencing difficulties with initiating an electronic blast. Needless to say this resulted in costly delays and much frustration. Due to COVID-19 restrictions, AECI’s electronic initiation support team could not travel to the customer site as it would traditionally do. The company employed its LogShot to extract data from the detonator units in question. Sebotse Nkoana, electronic technician at AECI’s head office in South Africa and part of the electronic initiation support team, talked the customer through the process via a phone call. She then accessed the extracted data remotely and proceeded to analyse functionality,



user actions as well as error messages. It was subsequently discovered that the blast initiation difficulties may have been a result of high-voltage cables and heavy electrical machinery that was recently introduced close to the blasting area. These installations had the same effect as installing a high-powered RF transmitter in close proximity to the harness wire, which would obviously interfere with electronic data transmission.


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prepares for shaft sinking at Karowe Mine


haft sinking and engineering specialist United Mining Services (UMS) is gearing up for the pre-sinking of two shafts for the Karowe Underground Mine Expansion Project (UGP) in Botswana. Following the completion of the feasibility study for the Karowe UGP, UMS was appointed by Lucara Botswana and JDS Energy & Mining in October 2019 to engineer and design the shaft sinking of the production shaft (8.5m in diameter), and the ventilation shaft (6m diameter), both reaching a depth of some 750m below surface. Lucara Diamond 100%-owned Karowe mine is one of the world’s leading producers of large, high-quality, Type IIA diamonds. Karowe is an open-pit mine with operations until 2026. The UGP will extend Karowe’s mine life to at least 2040. At the end of 2020, Karowe’s total probable mineral reserve is estimated at 53.9mt containing 7.4 million carats including stockpiles.

Drill rig in the Karowe ventilation shaft.

Kibble on the Karowe ventilation shaft bottom.

UMS is using vertical shaft muckers and jumbo drill rigs to drill at Karowe mine. – Louw

According to Lucara, the Karowe mine remains one of the best producing mines of high-quality +10.8 carat diamonds, having yielded five of the 10 largest diamonds in recorded history. It’s the only mine to have recovered three diamonds greater than 1 000 carats. Dr Pieter Louw, group executive project services at UMS and UMS’s project manager, says the company’s wealth of knowledge and expertise in shaft sinking played a key role in securing the contract, and that the company is bringing in the heavyweights in the industry for the project. Louw explains that the two shafts at Karowe will be blind sunk using conventional drill and blast techniques. The production and ventilation shafts will both have equipment installed to pre-sink to a shaft depth of 100m if required to accommodate the main sink shaft equipment.



The pre-sink phase also allows the sinking process to commence as soon as possible while the main sink infrastructure is being fabricated and installed. The new underground mine’s production shaft will have an A-frame-type headgear, which will hoist 21-tonne payload skips, and will have a single drum auxiliary winder for people movement, and a man/material winder with counterweight and a big cage to service the underground. UMS has refurbished four winders, which will be going to the mine for shaft sinking, including two stage winders and two kibble winders. The company also purchased and refurbished Scotch derrick winder cranes,


which will be used for the pre-sink. The main sink will take another two years after that, ready for mine development to commence in 2024, and full underground operations in 2026. To make sinking safer, Louw says UMS has adopted different sinking methodologies and equipment to be used at Karowe. “In the past, we used to sink with cactus grabs which needed people in the bottom. We are now using vertical shaft muckers and are buying state-of-the-art jumbo drill rigs to drill at the bottom. We’re doing inline work as opposed to concurrent work with people working at the bottom.” ■

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BANKING’S ROLE in mining’s energy transition By Henk de Hoop, resources sector focus lead at RMB


he Intergovernmental Panel on Climate Change has just released its sixth assessment report. “It is unequivocal that human influence has warmed the atmosphere, ocean and land. Widespread and rapid changes in the atmosphere, ocean, cryosphere and biosphere have occurred.” Even before the publication, global momentum behind environmental, social and governance (ESG) concerns, and specifically global warming, has been nothing but astounding over the past 18 months or so. The financial industry in South Africa has similarly seen a strong surge in ESG-related questions and concerns from shareholders, clients, rating agencies, regulators, funding partners and other stakeholders. For the South African financing industry, these concerns are not necessarily focused on our own direct Scope 1 and Scope 2 emissions, which are relatively limited and not considered too challenging to ameliorate significantly over time. Our main focus will be on Scope 3 emissions, or the banks’ attributable share of their underlying loan portfolio clients’ emissions. We will be held accountable in time in driving the energy transition within our portfolio, and to measure and report on this appropriately. We are therefore going through an extremely steep and complex learning curve to make sure we align strategy appropriately to the threats and opportunities this new reality brings.



We expect also that transparent reporting on transition plans and the emissions footprint will be expected soon from all large entities wishing to borrow in the capital markets. The Task Force on ClimateRelated Financial Disclosures therefore will highly likely become the market minimum standard, and increasingly will be requested by banks and other stakeholders also in the future.

Henk de Hoop.

South Africa has very specific challenges. Its rich endowment of shallow coal deposits has resulted in its electricity generation being heavily coal-dominated. Many decades of some of the cheapest electricity in the world also saw it attract heavy electricityconsuming industries like aluminium, ferro alloy, PGM and mineral sands smelters. Sasol became an amazing success story as it managed to develop into a massive


industrial complex adding significant and diverse value to millions of tonnes per annum of low-quality coal. And over the past few decades South Africa built a great reputation as a reliable supplier of highquality export thermal coal, becoming one of the largest foreign currency contributors for the country. But this historical advantage is now putting South Africa at an increasingly real future disadvantage. South Africa is in the top five globally of CO2 emissions per unit of GDP generated for economies with GDP larger than US$100-billion, and its coal share in electricity generation is one of the highest in the world at some 80%. Weaning the country off coal is hugely challenging in view of the very significant role it plays across our economy currently. At the same time, it also allows for some very quick emission reduction wins, particularly in view of the already planned retirement profile of Eskom’s older coal fleet. An indirect benefit will come from the seethrough impact on heavy power-consuming industries. This broad set of users will only make real headway in Scope 2 CO2 emission reductions if either Eskom radically changes its power generation mix, or they procure renewable energy independently. Since the embedded generation limit was increased to 100MW, we have indeed seen a strong acceleration, enlarging and broadening of the pipeline of renewable projects from our client base. Where previously the rising cost and reliability of

© ISTOCK – Teamjackson © ISTOCK – imacoconut

SA needs to radically change its power generation mix.

The financial industry has seen a strong surge in ESG-related questions and concerns. – De Hoop

© ISTOCK – zhaojiankang

Eskom power was the main investment rationale, now corporate emission reduction targets have made renewables an even more defendable or rather “no brainer” investment proposition. The South African banking industry is increasingly aware of the broad set of risks that could and will build into our diversified lending portfolios due to climate change. Rising temperatures will see an increase in multi-year droughts which will affect the agricultural sector base. A shrinking coal sector could leave it with stranded assets in time. Any export industries could be penalised if the Eskom transition away from coal is too slow in the eyes of the rest of the world. Rating agencies could downgrade the South African banks if we don’t move the needle sufficiently with regards to the carbon intensity of our book. We could be facing future environmental damages litigation if we are not progressing in transitioning our portfolios over time. In working through the complexities and impacts, we are engaging intensely with all stakeholders.

The detailed research work being done by the National Business Initiative (NBI), which we support, has already demonstrated that it is feasible for South Africa to have a Parisaligned energy transition pathway. South Africa’s unique combination of excellent and complementary solar and wind resources, available on vast amounts of unused land, could become a truly globally competitive advantage as we transition our energy system. Hence, a renewablesdominated energy system looks like the most cost-competitive system for South Africa, according to the NBI. We do need to get to work urgently though: our annual rate of renewables installation needs to increase by a factor of 10. According to Eskom our transmission and distribution network needs some R180bn in capital for expansion and upgrades to even allow for the sharp increase in renewables generation. We also need to rapidly develop wheeling frameworks, grid operator capacity and market pricing frameworks. We are acutely aware that working with

our client base rather than forcing unrealistic decarbonisation expectations on them before the basics are in place is a far more sensible approach to come to the correct answer for South Africa’s transitioning pathway. Abruptly constraining funding to the carbon-intensive industries therefore will simply create untold immediate damage to the broader economy as electricity supply destabilises further. Banks, capital markets and the mining industry need to work in partnership therefore to drive a responsible transition towards the low-carbon world. This should be anchored in facts and data and aligned to researched pathways considering economic and social consequences. As well as actual implementation timelines that are realistic and achievable, but with a sense of urgency, as the rest of the world looks at South Africa doing its fair share. Doing nothing will certainly impact both the clients’ and the banking industry’s ability to access competitive funding in time. ■







he South African mining industry has become one of the most regulated in the country over the past few years. Carefully considered regulation can be powerful and provide interested parties with equal and fair opportunity to explore and mine in South Africa – but when the rules of engagement contradict one another, regulation becomes a confusing deterrent. Despite an intensive focus on further regulating the environmental impacts caused by mining, there have also been various amendments to legislative instruments that are intended to streamline certain processes in the Mineral and Petroleum Resources Development Act, 2002 (MPRDA). But everchanging regulations may keep this ambition out of reach. During March 2020, the mineral resources and energy minister published amendments to the Mineral and Petroleum Resources Development Regulations, 2004 (Revised Regulations). The purpose of the revised regulations was, among others, to streamline environmental aspects of the regulations with the relevant environmental legislation as these regulations had not been amended after the One Environmental System came into effect on 8 December 2014. This was recently followed by the forestry, fisheries and environment minister publishing amendments to the Environmental Impact Assessment Regulations, 2014 (EIA Regulations) in June 2021. Among others, the amendments contemplate that: ■ An application for an environmental authorisation (EA) may, where applicable, only be submitted after an application for



a right or permit has been accepted by the relevant regional manager in terms of the MPRDA. ■ Written consent from the landowner or person in control of the land on which the mining or prospecting activity is to be undertaken must now be obtained. The requirement to submit the EA application only after an application for a right or permit has been accepted in terms of the MPRDA is in complete contradiction to the provisions of the MPRDA, which requires that such an application be submitted simultaneously with an application for a right or permit. On a correct interpretation of the MPRDA, the regional manager would be prohibited from accepting the application otherwise. It is generally accepted that landowner consent is not a requirement for the purposes of applying for a right or permit in terms of the MPRDA. In fact, in terms of the MPRDA, the holder of a right or permit merely needs to provide the landowner with notice prior to commencing operations. The amendments to the EIA regulations require, however, that landowner consent is required prior to a right or permit even being granted under the MPRDA. This is not only in contradiction of the terms of the MPRDA, but is onerous and may discourage any future applications being submitted for rights or permits. This would contradict (perhaps inadvertently) the objectives of the MPRDA and constitutional right to equitable access to all South Africa’s natural resources. The amendment to the EIA regulations heightens the tension between the right to property versus the right to access to natural resources, potentially stifling the ability for


NSDV is deeply committed to advancing the SA mining industry – so committed in fact that it has its own principal environmental practitioner.

Chantal Murdock.

Minnette Le Roux.

further exploration and mining in South Africa. These recent amendments to the EIA regulations (which is subordinate legislation) contradict the provisions of the MPRDA (which is primary legislation) and is causing much angst amongst role players as it leaves the following questions unanswered: Is it in fact possible to have a One Environmental regulatory regime? And which department is actually controlling the mining industry? These contradictions appear to require the two departments to reconsider how they will engage the sector in unison. ■

© ISTOCK – James.




Mark Gilbert CEO at NSDV

In October 2009, first world governments chose to print money in an attempt to curb the unfolding global debt crisis. It was the embarkation of the greatest monetary experiment of all time. As cash and financial assets start to devalue, people will look for alternative stores of wealth. Here’s the good news. Value ultimately ends up in real, tangible assets. These assets remain as they are, regardless of the currency they’re denominated in. They cannot be printed (replicated), and therefore cannot be devalued. One of the greatest cyclical reallocations of capital from intangible financial assets into real assets is upon us, and the ultimate winner will be commodities. As an example, timber prices were up 72%, iron ore was up 60%, and platinum group metals were up by 40% in 2020 based on US-dollar values.

The performance in rand was even more spectacular. Northam Platinum was up 80%, Sibanye-Stillwater nearly 100%, and Anglo American just reported their best financial results in 104 years! Today, Amazon trades on an over 1 000-to-one price-to-earnings ratio, and it’s one of the many companies that are considerably overvalued, while commodities businesses are by contrast undervalued. If you buy Amazon shares this year, you can get your money back out of earnings in 3021. At NSDV, we focus on the difference between where we perceive value (speculation) vs actual value (investment). NSDV has decades of experience in investing, advising, and working alongside the continent’s key commodities businesses at the C-suite level.

Terror Firmer Until recently, so-called “growth companies” were considered solid ground for investors. But with the South African economy reeling, many are now running scared. It’s likely that physical assets – including precious metals – are going to become an increasingly attractive option, which will see those commodities outperforming others in the short term. It’s time to strike while the iron – or copper, gold, platinum or vanadium for that matter – is hot, and partnering with NSDV will enable you to do just that. To find out how our second-to-none expertise and remarkable agility can help you capitalise on trends ahead of the curve for optimal results, visit today.

Nupen Staude de Vries

The views expressed are the author’s own and do not necessarily reflect SA Mining’s editorial policy.

© ISTOCK – monsitj


GEOSCIENCE ACT Could draft regulations pose a threat to exploration companies in SA?

By AngloGold Ashanti senior specialist: legal Aviona Mabaso




Aviona Mabaso.

The draft regulations require extensive disclosure of prospecting and mining information. – Mabaso

ining is a big, expensive business. To actually take a greenfields project from nothing to bankable feasibility and all the way to actual mining is an expensive exercise. It’s funded by investors who have the appetite for such a risk or gamble that millions of dollars can be sunk into the ground to find nothing. It is therefore no surprise that information on a mineral resource is closely guarded intellectual property of the explorers. In South Africa the Geoscience Act makes provision for the Council for Geoscience to serve as the national custodian for geotechnical, prospecting and all other geoscientific information relating to the earth, the marine environment and geomagnetic space, all of which must be lodged with the council. The Mineral and Petroleum Resources Development Act (MPRDA) also makes provision for the lodging of data with the council. The Council for Geoscience’s objectives are to promote the search and exploitation of minerals in the country, undertake research in the field of geoscience, act as a national advisory on geohazards to infrastructure and development and geoenvironmental pollution brought about by mineral exploitation and other actives, and provide specialised geoscientific services. The council is represented by a board that consists of a chairperson and officials appointed by the mineral resources minister from the departments of water and sanitation, rural development and land reform, as well as human settlements,

science and technology, Treasury, and four people with appropriate experience or knowledge. Although the Geoscience Act specifically prohibits the council from undertaking any mining development for itself or any research on behalf of any private institution that would favour another in acquiring an asset, the holders of prospecting rights are required to submit progress reports and data relating to their prospecting operations to the


Department of Mineral Resources and Energy (DMRE) and the Council for Geoscience. No person may dispose of or destroy any record, borehole core data or core-log data except in accordance with the direction of the DMRE in consultation with the council. These records are not generally accessible to the public. Recently the mineral resources and energy minister published draft regulations for public comment that would require extensive disclosure of prospecting and mining information by rights holders and non-right holders. If enacted, these draft regulations would require all onshore and offshore prospecting geoscience data and info (e.g. technical reports, progress reports and prospecting reports) on reconnaissance and prospecting to be lodged annually by the right holder from date of grant or within 30 days of it lapsing. There is a regulation titled “lodgment of all onshore and offshore geoscience data and information, not related to reconnaissance and prospecting”. Although it was not specified, I believe this provision was supposed to apply mutatis mutandis in respect of mining rights and mining permits. All onshore and offshore geoscience data and info collected by any non-right holder would need to be lodged as well. Non-rights holders include South African and foreign governments, and private and public entities. Any foreign entity that undertakes geosciences research would need to inform the council within 60 days, and submit a report of their research within an agreed time

© ISTOCK – tifonimages


Mineral resource information is closely guarded intellectual property of the explorers. – Mabaso frame of completion of research. It doesn’t mention by when South African non-rights holder entities need to submit geoscience data and information it collected. All historical onshore and offshore prospecting and reconnaissance geoscience data (e.g. technical reports, progress reports and prospecting reports) that is more than 15 years old would need to be lodged within 18 months of the commencement of the draft regulations. This obligation also seems to apply to any person (private/public, including foreign governments and entities). The MPRDA already has some disclosure obligations with respect to prospecting. Firstly, the holder of a prospecting right or reconnaissance permission is required to keep and submit proper records of their operations, submit annual progress reports and data, and submit a further report on expiry of the right, to the regional manager of

the DMRE. That manager must submit this to the council. Secondly, no closure certificate may be issued unless the Council for Geoscience has confirmed in writing that complete and correct prospecting reports in terms of s21 of the MPRDA have been submitted, and complete and correct borehole core data or core-log data that the council deems relevant has been lodged. In the case of a (mining) right or permit holder, the complete and correct surface and relevant underground geological plans must have been lodged. Lastly, s30(5) of the MPRDA requires all information submitted to the Council for Geoscience (by the holder) in terms of s21 of the MPRDA to be kept confidential until such right prospecting right/reconnaissance permission has lapsed, is cancelled, or terminated, or the area they relate to has

been abandoned or relinquished. S30(3) of the MPRDA entitles holders and applicants to specify which information may be disclosed and what must be treated as confidential and remain undisclosed. Although the council may take information into custody except where another law imposes a restriction on the publication or display of such information, the way that the current draft regulation is phrased, all geoscience data and information may be made accessible and disseminated and made available on written request (of anyone). This includes information submitted in terms of the Geoscience Act as well as the MPRDA. This conflicts with s30 of the MPRDA and is ultra vires section 6(2) of the Geoscience Act. The regulations contain no secrecy or confidentiality provision regarding documents, information, and particulars so provided. This would be a huge hindrance to trying to sell exploration projects. Keep in mind that the Geoscience Act already allows the council to produce and sell reports, maps, computer programs and other intellectual property which it generates from its research. Although nothing stops owners of information from monetising and selling the data, they can’t warrant/guarantee that the info is and will remain confidential/ secret. The Council of Geoscience would end up being the biggest competitor of other explorers. This could deter investors from investing in exploration companies in South Africa. After all, investors of exploration companies are investing to gather data. ■


© ISTOCK – DanielIngelhart

Exploration companies invest to gather data.



© ISTOCK – LYagovy

Prospecting geoscience data.

COLUMN © ISTOCK – LubaFilatova




© ISTOCK – Wiyada Arunwaikit




The views expressed are the author’s own and do not necessarily reflect SA Mining’s editorial policy.


in new projects. This will also have a positive he sun is not setting on the mining knock-on effect to assist in reducing the level of industry, but if South Africa wants to unemployment in the country. optimise the benefit, the sector needs The current financial position of most mining to improve its preparation for the companies is stronger. There has been a concerted opportunity on its way. effort to reduce debt levels, which could factor into South Africa’s mining industry, while able to a revisit of new opportunities. continue during the COVID-19-induced lockdowns, There are concerns that the higher commodity was still hindered by the disruptions caused with prices will not hold and may decline as is customary employees contracting the virus or whose members with all commodity cycles. But for about the next in their communities fell ill. three to five years, the current upward trajectory Compounded by the recent civil unrest in many should remain with bouts of volatility. The mining parts of the country, while mine production wasn’t industry does go through commodity price cycles, directly affected, downstream processes were; and where prices do decrease, but historically demand so were the communities who work in the mines. Johann Erasmus has always bounced back. While the labour-intensive industry is seeking Executive director at 1nvest Aside from the labour costs, one of the solutions for their current challenges, the market concerns for the industry is accessibility to regular, presents growth opportunities. uninterrupted power supply. The recent allowance of 100MW power The most popular mining commodities are no longer gold production permitted without a generation licence is a positive step and diamonds, but rather platinum group metals (PGMs). These forward, and will ease the burden for the industry. commodities have performed very well over the past couple of years. Mining companies are also being proactive in their environmental, The prices of metals used in environmentally friendly projects social and governance responsibilities, especially around people and and products are expected to increase as demand increases. This is the environment. because of the re-electrification Mining historically has a of the world, including renewal poor reputation when it comes energy solutions and electric to environmental and social cars. concerns. But it is important With the current chip to note that especially new shortage that is expected to be mines who have access to solved in the next year or two, newer technology are incredibly this will push up the demand conscious about the effect they for PGMs and other metals. This have on the environment and the is due to the pent-up consumer communities that support them. demand as economies are Water, especially in a country opening up after COVID and that has a limited supply, is global logistic challenges, from another concern that the mining vehicles to white goods and industry has. other electronics. In the industry, using water China is increasing its metal wisely and safely must be top of the agenda. New technology is stockpiles. This is in anticipation of the upcoming demand. allowing the mines to be more water-conscious not just in usage but There is a massive opportunity for South Africa as well as countries to protect the resource from contaminations. in the rest of Africa to meet the expected increase in demand which is While some may say it’s a sunset industry, mining in South Africa expected to continue on an upward trajectory. has the opportunity to grow and flourish, and it remains a large Delays in the development of new mining projects in South Africa contributor to the country’s GDP. If the sector prepares well and could place the country in an unenviable position where it may lose South Africa can become a beneficiation hub in Africa, it will be an out to its competitors on the rest of the continent. instrumental sector in assisting our economy, and place the country An increase in revenue from higher commodity prices may make on a stronger road to recovery. ■ some mining companies reconsider their position on investing


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MENAR DIVERSIFIES Develops East Manganese

Menar’s current investments include anthracite, manganese, nickel-cobalt and gold, Menar is seeking geographical expansion into Turkey and the Kyrgyz Republic. ■ The company’s growth strategy is underpinned by acquisitions and greenfield project developments.

By Nelendhre Moodley


s part of its diversification strategy, mining investment company Menar is at an advanced stage of developing a test case through its East Manganese operation in the Northern Cape. The Hotazel operation has reached first Manganese ore at the beginning of September 2021 and will soon be ramping up to nameplate capacity of over 30 000 tonnes a month of ore. SA Mining recently caught up with chief operating officer of the East Manganese project, Kobus Rothmann, to chat about the project development and its environmental management strategy. According to Rothmann, Menar is carrying out concurrent rehabilitation of mining areas as it progresses the project. “To date, the Menar Mining Services workshop has been completed, as well as the ablution facilities, the run-of-mine pad, the processing plant and the pollution control dam, ramps and mine roads. The onsite laboratory is in the final stages of construction,” he says. Given that the East Manganese mine is situated in a water-scarce area, the water is being sourced from the Sedibeng pipeline. Strict compliance with environmentally sound water-use methods will be considered part of the project’s success. “The mine’s dry crushing and screening plant has been commissioned, which will improve the mine’s water-use efficiency. East Manganese uses a closed water reticulation system, which ensures that no contaminated water is released from the site,” Rothmann says. “The water is channelled and collected in pollution control dams. This water is in





Number of people benefiting from East Manganese mine turn used for dust suppression within the mine’s boundary and in the processing plant. The project is committed to adhering to all environmental regulations.” Rothmann says potable water is used only for consumption by the mine’s employees. Although the miner has considered the use of solar energy to power the mine’s infrastructure, such as weighbridge and office operations, the idea was considered not viable due to the limited life of the mine’s three years. “We would have liked to use solar, but unfortunately it would not have been economically efficient because of the short lifespan of the mine,” says Rothmann. Thus all electricity needs are met through generators. East Manganese is contributing to the economic development of the small


mining town, as it was projected to create between 70 and 80 direct new jobs at peak production. “If we multiply this figure by 10 (which is the average number of people who are dependent on a single salary earner in South Africa), then in essence 700 to 800 people will directly benefit from this project. The mine currently has 80 employees, mainly recruited from local communities,” Rothmann says. “In addition, indirect economic benefits of the operation, even though not quantifiable, will also be far-reaching. We have since inception provided opportunities to local companies with abilities to deliver cost-effectively. We are engaging with local stakeholders, including the local municipality, to finalise and execute our Social and Labour Plan as required by legislation.” n



AT IVANHOE MINES’ PLATREEF OPERATION By Jasmine Abrahams: group manager, sustainability – Ivanhoe Mines




In an effort to remain as agile and resilient as possible, Ivanhoe adopted a COVID-19 response plan early. This commenced with the appointment of a team with overall responsibility for COVID-19 response efforts. Following the guidelines outlined by the World Health Organization, and supported by drawing on the experience of its Chinabased partners CITIC Metal and Zijin Mining, Ivanhoe established a task team from senior management with overall responsibility for COVID-19 response planning well before the situation was declared a pandemic.

Ivanhoe’s proactive steps ensured minimal disruptions and mining development was on track. – Abrahams


ast year (2020) was a year that rocked the globe and brought industries, economies and entire nations to their knees. Some organisations and industries, however, managed to remain resilient by relying on their agile riskmanagement approach and the adoption of technology as key drivers for their survival. The world was forced to adapt to rapidly changing circumstances such as nationwide lockdowns, social distancing and remote working. But despite the continued spread of the COVID-19 pandemic around the world, wave after wave, which created an unprecedented series of impacts on everyone’s work and personal lives, we recognised that operational continuity is and remained critical for jobs, the communities around our Platreef operation and the local economy. The nature of our mine development project is such that certain work cannot be done remotely, so our focus has been on reducing the risk of COVID-19 spreading to our project. Ivanhoe therefore took swift and precise steps to both reduce the risk of the virus spreading and to ensure that we have the financial strength and resilience to weather the pandemic crisis in order to protect the continuity of our business. And we couldn’t do this without our people. Despite the strain, grief and challenges presented during 2020, our teams rallied together, providing their unwavering commitment and support. They enabled Ivanhoe not only to navigate the unprecedented impacts of COVID-19 on our operations and daily engagements, but also to foster innovative partnerships and solutions to some of our problems which will have lasting, positive effects for our operations and host communities.

This task team, led by Dr Nicolette du Plessis, a specialist in paediatric infectious diseases and a professor at the University of Pretoria in South Africa, comprised company representatives with expertise in health and safety, operations, law, human resources, and communication, as well as specialist doctors, paramedics, nurses and outside counsel from world-leading epidemiologists.


The team swiftly implemented key procedures across the business to ensure minimal disruption to operations and focused particularly on the health and safety of all of our employees and contractors, as well as our host communities. Ivanhoe took various measures to ensure business continuity, such as identifying several cost-reduction initiatives to generate cash savings and conducting a continual review of purchase orders and our supply chain to minimise disruption to the project.


Ivanhoe also made strides in policy creation, awareness and capacity building for the sake of its people and the security of operational continuity. With agility and supportive risk guidance, the company put in place COVID-19 policies, mandatory codes of practice, standard operating procedures, transport and quarantine/isolation initiatives, training programmes and employee-centric emergency response procedures.


As part of our COVID-19 response plan, the company also implemented a number of health readiness measures to continue improving our health and hygiene protocols and emergency response capabilities, support the most vulnerable people in our society, and provide critical health, safety and other supplies where the need was greatest. Through these proactive steps, we have ensured minimal disruptions to our activities and kept our mining development on track. Coordinated treatment efforts in the early stages of the pandemic further saw the company working closely with our host governments, who acted swiftly and decisively in legislating measures to curb the

“ Ivanhoe partnered with Ndlovu Lab Services to vaccinate 293 employees. – Abrahams

spread of the disease. And the journey in our fight against COVID-19 continues. On 26 and 27 July, Ivanhoe partnered with a reputable non-governmental organisation, Ndlovu Lab Services, to vaccinate the Platreef operation’s employees. Over the course of these two days, 293 employees received vaccinations, expressing excitement and gratitude for the notion of better health and a sense of moving forward. The second phase of the vaccination programme is set to commence in early September 2021, and will include second rounds of vaccinations as well as first rounds for those who missed the initial opportunity. The health and safety of our people remain paramount and we believe that through proactively working together in the spirit of cooperation, we will overcome one of the greatest challenges faced in our lifetime.

We commend our teams’ efforts undertaken to date. As we progress through the development stage of our Platreef project, and from the “new normal” to the postCOVID-19 ways of life, we believe that we are strongly positioned at the forefront of developmental opportunity – for our existing stakeholders and future generations. Becoming an “impact organisation” is crucial to secure the full benefits of longterm success and we acknowledge that industry and business, as key role players in society, must take the lead in responding to the global challenges and national development agendas.

This means that now, having faced the biggest challenges of our time in the COVID-19 pandemic, recovery is a top priority. Ivanhoe must and will heed the unique opportunity to reshape our economy and society to be more resilient, inclusive and collaborative, and to thrive sustainably. ■






HEALTH, SAFETY AND ENVIRONMENT By Nico Pienaar: director at Aspasa


ow did it all start? The first health, safety and environment legislation was developed in the United Kingdom (UK) in 1878. The rules targeted safety in the quarry sector and included the use of explosives, machinery and plant, duties of owners, first aid and ambulance services, among others. A Quarries Act came into force in 1894, providing the platform for early enforcement of legislation in Europe. The level of enforcement through the courts in the UK seemed high but this was against the backdrop of 8 000 quarries, from which 1 150 quarrymen were killed and over 12 000 reports of serious injury made. Clearly this was a huge problem, and this spilt over into South Africa as our mining industry developed. As for environmental concerns, these seem to take a backseat when compared to health and safety issues. However the world is under increasing pressure from the depletion of resources. The demand for non-renewable resources, such as minerals, results in the destruction of the environment. In the simplest terms – as human beings, we depend on the environment for our survival, and so it is important that we safeguard it. From an industry perspective, Aspasa supports increased accountability aimed at reducing environmental risk – otherwise known as Environmental Management Systems (EMS). Aspasa has developed its own system based on the EMS with a focus on the smaller opencast mining sector called the About Face RSA Programme.

pieces of legislation is often in conflict. In unpacking legislation, there are many questions that arise, including: ■ Are there obligations imposed on owners, employers, managers and employees regarding health and safety? There are most certainly extensive obligations imposed on all players in relation to health and safety, including in relation to statutory appointments, liability, committees, inquest and inquiries. ■ What environmental authorisations are required in order to conduct reconnaissance, exploration and mining operations? Currently the holder of a prospecting right or mining right is required to have an approved environmental authorisation, prior to the conducting of the relevant activities. In addition, the right to use water is governed by the National Water Act, 1998. ■ What provisions need to be made for the closure of mines? The holder of a prospecting right or mining right must furnish (during all stages of the project) sufficient pecuniary provision for rehabilitation which is reassessed on an annual basis. This is done in terms of a deposit with the Department of Mineral Resources and Energy (DMRE), a bank guarantee, or a trust. ■ What are the rights of the holder of a mining right to conduct reconnaissance, exploration, or mining to use the surface of the land? The rights to use the surface of the land to conduct reconnaissance, exploration, or mining in terms of the Mineral and Petroleum

Resources Development Act (MPRDA) are extensive. The holder may: ■ Enter the land to which such right relates, bring his or her employees onto the land and any plant, machinery or equipment or build or construction or lay down any surface, underground or undersea infrastructure, which may be required for the purposes of exploration or mining. ■ Prospect or mine for his own account. ■ Remove and dispose of such mineral. ■ Use water in relation to prospecting or mining activities. ■ Carry out any other activity incidental to exploration or mining. ■ What obligation does the holder of a reconnaissance right, exploration right or mining right have regarding the landowner or lawful occupier? The holder of a reconnaissance right, exploration right or mining right has duties towards the landowner or lawful occupier in terms of consultation, and the holder of a prospecting right or mining right has to compensate the landowner for loss or damage suffered as a result of conducting of prospecting or mining activities. It is not necessary for the holder of a prospecting right or mining right to purchase land or even enter into an agreement to use the land with the surface owner once the DMRE has awarded the mineral right. Are there any special rules applicable to taxation of exploration and mining entities? There are extensive special rules applicable to taxation of prospecting and mining companies including in relation to capital expenditure deductions. To qualify





© ISTOCK – getty_dumy67

There is a separate piece of legislation dealing with health and safety in mining, namely the Mine Health and Safety Act, 1996. Previously, mine health and safety was dealt within the same ambit as the relevant mining law, namely the Minerals Act, 50 of 1991, but it was removed and placed in a separate piece of legislation as the purpose of the two

– Pienaar

as a mining company, one has to hold a prospecting right or a mining right granted in terms of the MPRDA. ■ Are there royalties payable to the state over and above any taxes? Yes there are – in terms of the Mineral and Petroleum Resources Royalty Act, based on earnings before interest and tax formulation. ■ Are there any local provincial and municipal laws that need to be taken into account by a mining company over and above national legislation? All exploration and mining companies need to comply with local, provincial or

municipal laws to the extent that they are not overridden by national legislation. Thus for example there may well be zoning requirements imposed in terms of provincial ordinances or, for example, municipal by-laws regarding smoke emission, which need to be complied with by the holder of a prospecting right or mining right. ■ Are there any regional rules, protocols, policies or laws relating to countries in the particular region that must be considered by an exploration or mining company? There are rules relating to the Southern

LEGISLATION RELATING TO THE ENVIRONMENT Legislation pertaining to the mining environment is inclusive of all mining operations – big and small – as well as proposed operations. You are mining when you remove a mineral from its natural state in the earth. Once you have dug it out, or picked it up, you have mined it.

© ISTOCK – Sunshine Seeds

You are mining when you remove a mineral from its natural state in the earth.

© ISTOCK – Alexey Rezvykh

African Development Community (SADC) region that govern exemptions from import duties, custom restrictions, repatriation dividends and the like that may help companies operating in South Africa regarding activities conducted outside South Africa but in the SADC region. ■


KAL TIRE at the forefront of customer service and innovation By Nelendhre Moodley


ealth, safety and environmental issues continue to take front and centre stage at boardrooms and mine sites across the globe. As such, the tyre market is evolving in line with customer needs and industry requirements, says Kal Tire’s Mining Tire Group, VP Southern Africa, John Martin. SA Mining recently caught up with Martin to chat about the key elements driving industry change.


We have a sense from our customers that environmental stewardship and corporate social responsibility are gaining a great deal of attention – both in boardrooms and at the mine locations. Although mines have always had a key focus on safety, this notion of widening that attention is quite evident. We see for example some customers focusing more on environmental, social and governance, which drives investment and development of new technology or innovations. This is not only to make jobs and tasks easier and safer, but to support our customers’ commitment to the environment, complement their social standing with mining communities and underpin their organisational governance.




We see tyre manufacturers – who normally work closely with original equipment manufacturers’ (OEMs) product portfolios – work on ways they can change the tyre construction or performance to match the new demands of automated or electrified fleets. Stresses and wear characteristics will undoubtedly change the dynamics of tyre wear and performance, and the tyre itself needs to be able to be matched to the duty cycles. Additionally, we are seeing more of a holistic approach to linking things together from a data collection perspective. So the machine sends data through sensors, and we include information from the tyre (heat, temperature, pressure) and add details about locations (GPS tracking) and even operating context (weather patterns, etc.). Taken all in combination, we can learn things about relationships that were difficult to determine before. For ourselves, we are keeping abreast of technological changes and innovations on a regular basis. We are having more involvement with OEMs and even third party data collection sources or aggregators. An organisation – even a tyre service provider – that is not taking notice of this fundamental shift from reactive service to predicative


John Martin.

analytics will find themselves minimising their impact on the value chain over time. It is not easy, and it is quite new for us, but we feel it is well worth the efforts.


Tyre manufacturers have for the most part performed reasonably well over the 2020/21 period. COVID has unfortunately forced a slump in the sale of light vehicles. However the demand for mining tyres has remained relatively robust, stemming primarily from increased mining activity in the face of favourable pricing development in global > commodities.

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The core principle behind all Kal Tire’s innovations is that what we develop should have a twofold effect on operations. The innovation should reduce risk and improve the operational efficiency. Our award-winning Gravity Assist System (GAS) is a prime example of this philosophy. It is designed in a manner that allows the technician to effortlessly handle and use very heavy torque tools, while further reducing health and safety risks, such as pinched hands and fingers, general fatigue, and muscle strain. Kal Tire will continue to innovate new and value-generating solutions, as part of our core competencies and functions. New riskreducing and productivity-enhancing tools will be released to the market in September 2021.



Kal Tire continues to deliver strong performance.

Tyre manufacturers are aligning tyre construction to new demands of automated or electrified fleets. – Martin

The tyre industry is however not without its challenges. It’s currently under severe pricing pressure through the unprecedented increases in the pricing of tyre products, as well as the fourfold increases in ocean-going freight. Kal Tire’s performance through 2020 and year to date 2021 has been strong and favourable, due to our very close alignment to the mining industry and its principal players, as well as the close cooperation with our selected manufacturing partners. While we have been warned of potential supply constraints for giant off-the-road (OTR) tyres, fortunately that has not materialised to affect the industry.

The ongoing evolution of Kal Tire’s proprietary Tire Operations Management System (TOMS) continues to deliver new functionality. TOMS is the most advanced management system for OTR tyres that positively impacts productivity, tyre life and safety. Focused on fleet productivity and accessible, near-live reports, TOMS gives the visibility for planned and predictive maintenance and thus enables informed, real-time decisions. With instant, visual communication between the entire fleet planning team, more tyre work can be performed while trucks are simultaneously down for maintenance.


One of the biggest environmental challenges South Africa has been grappling with for many years, and which remains a significant challenge and concern, is the ethical disposal of waste tyres. Mining customers are desperate to roll out their environmental stewardship obligations . However a fully functional waste tyre management plan is urgently needed, to allow our mine owners to exercise their obligations. An effective tyre abatement plan that serves all industries that generate waste tyres, and more specifically for the mining industry, is urgently needed. No facilities are currently available in South Africa that can effectively and ethically recycle the large stockpiles of waste mining tyres that the industry has generated over many years of stockpiling. Kal Tire has invested heavily in OTR recycling technology, which we call thermal conversion, which is specifically designed to cater for the recycling of ultra-large mining tyres. A proven and functional recycling facility is already installed in the La Negra district of Chile, which by design returns waste tyres into the original basic


components used for tyre manufacturing, fully supporting the development of a circular economy, in the most environmentally friendly manner possible. Existing technology of this nature can do extremely well for many of the established mining locations around South Africa, to reduce the many stockpiles of mining tyres that are causing ongoing environmental, health and safety risks.


Africa remains the one continent that is relatively unexplored, and continues to deliver several world-class mining projects, as exploration continues to grow on the continent. We are experiencing some consolidation of mining operations, as mining houses look to take advantage of the buoyant commodity prices. Growth opportunities certainly exist on the continent, in both brownfield and greenfield expansions, which is driving demand for additional services and products. The buoyant market has certainly brought about some stability into a market that was threatened by COVID-induced uncertainties a year ago. Kal Tire will continue to leverage our regional infrastructure as well as our broad width of services and product offerings to serve our existing customer base, and be well placed to expand into the greenfield and brownfield expansions. These growth opportunities are necessitating new investment in additional infrastructure and service capacity, in locations that place Kal Tire’s service capabilities geographically closer to any new operations. ■

If its not INVAL, it’s not Invincible

© ISTOCK – michaeljung


TRANSNET INCREASES UPTAKE OF WOMEN The gradual increase of women in the maritime logistics sector has seen just over 1 300 more women joining Transnet Port Terminals (TPT) in the past six years alone. Predominantly a male-dominated industry, the rise in woman engineers, artisans and operators places the representation of women at 31% of the total employee population, which is currently at 9 735, the company says. “We have passed the age of ring-fencing softer positions for women because women have proven competent enough to land positions across business disciplines and trades based on acquired skills and merit – and despite presenting challenges, they have performed exceptionally,” says general manager of people management at TPT Caroline Mayeza. With a cumulative spend of R263-million on women’s development programmes over the same six-year period, TPT has been implementing seven development initiatives including two with international immersion. According to Mayeza, this is to ensure that there is a pipeline of woman leaders in the business across technical, operations, support functions and leadership. The overall TPT target for women’s representation is 35%, a figure that Mayeza believes will ensure the success of the transformational agenda.

SANDVIK RELOCATES TO NEW FACILITIES Engineering group Sandvik Mining and Rock Solutions has moved its South African headquarters to new, purposedesigned premises in Kempton Park near Johannesburg. According to Simon Andrews, managing director at Sandvik South Africa, the state-of-the-art Khomanani facility includes three large workshop areas and office space on a 62 000m2 site. “The technical synergies of the workshops add to our commitment and capacity for local production that meets global quality requirements.” Two of the workshops are dedicated to refurbishment and rebuilding of local equipment for the Southern African region – mainly Botswana, Namibia and South Africa. This is where new standard-format equipment is configured for local use – typically including features like safety systems, lighting, toe-hitches and decals to customer specifications. “Our remanufacturing facility allows us to completely rebuild machines to original equipment manufacturer standards, including the sub-assembly refurbishments on transmissions, axles, differential and pump motors,” he says.

NEW CAT HYDRAULIC MINING SHOVEL HAS IMPROVED FEATURES Offering more drive options to meet the global mining industry’s needs, the new Cat 6040 Hydraulic Mining Shovel features an added engine configuration that meets US EPA Tier 4 Final and EU Stage V emission standards. The new configuration includes two fuel-efficient Cat C32 engines, offering a total gross power rating of 1 550kW (2 079hp). Optimising machine uptime and lowering operating costs, the engine package includes maintenance-free diesel oxidation catalysts (DOC) and does not require diesel exhaust fluid (DEF)/ AdBlue or diesel particulate filters (DPF), says the company.




Heavy-duty undercarriage.










The views expressed are the author’s own and do not necessarily reflect SA Mining’s editorial policy.

© Robert Tshabalala @ Financial Mail

need government and economy. ight months into 2021 – the year of Unfortunately, it is South Africa Inc that is mainly fabulous commodity prices for South responsible for revenue flows being far less than African mining companies – and with just they should be for all these commodities and others. four months remaining, what can mining Coal exports alone are $1bn less than they would investors and participants look forward to have been under normal rail conditions. Iron ore for the rest of the year? receipts are more than $1bn less than they should Mining companies the world over seldom have have been and manganese and chrome are less too. had it this good. Earnings per share in dollars for But the fact is South Africa’s decrepit, underthe South African Resource Index (RESI 10), which invested, under-maintained and constantly undertracks the market cap of the resource companies siege infrastructure is now a serious bottleneck listed on the JSE, are now at all-time highs in on the whole country – and not just the mining nominal terms, as are South Africa’s receipts for companies. Only belatedly is government waking commodity export earnings (which could be as high up to this fact. The worry is it will probably be years as $55-billion in 2021). Peter Major before government has an implementable solution Interestingly, the RESI 10 share prices are not Mergence Corporate – which is way too late for most mining company at all-time highs; not even close. In 2007, 2008 and Solutions Director: Mining investors, and too late for much of South Africa’s 2011 South African mining companies’ share prices very needy population. were 60% higher on the same earnings they have Shortfalls due to degraded and under-siege railroad capacity of today. And for once we can’t blame all of that poor valuation on South up to 10mt of export coal at $100/t and +5mt of iron ore at $200/t are Africa alone, because most of the RESI 10 companies now operate leaving huge gaps in companies and South Africa’s income statement. outside of SA. Iron ore prices for South Africa have averaged over $200/t this year Still – crime, corruption, mayhem and service collapse in the compared to $85/t in real terms country are as bad as ever, for the past 65 years. What a and yes, the Department of Iron Ore $ ton real 62% Fe fines 240 240 waste! Mineral Resources and Energy MEAN = 84.9055 Std.Dev. = 39.5124 200 200 These are once-in-a-century (DMRE) and the government 150 150 missed opportunities that South in general are as difficult and Africa is not able to capitalise on, dysfunctional as ever. (Although 100 100 to its own detriment (and to its we may be finally getting to a competitors’ advantage). sustainable bottom on those 55 55 Platinum/PGM producers don’t last two, with some flickers of 35 35 have the logistical constraints of light now visible in the 20-year 30 30 26 26 iron ore, coal, manganese and tunnel of darkness.) ‘58 ‘63 ‘68 ‘73 ‘78 ‘83 ‘88 ‘93 ‘98 ‘03 ‘08 ‘13 ‘18 chrome producers. But they are Commodity prices today, constrained by Eskom’s power on the whole, do seem to have RESI in $ 5 000 5 000 shortages and regular community finally left their insane (in many 4 000 4 000 and literal gang and mafiosi cases) price levels behind them. groups and demands. Iron ore is now $145/tonne, 2 000 2 000 Eskom is a serious constraint down from $235/t in early May. 1 500 1 500 on all local mining and logistics; Rhodium is $17 300/oz after 1 000 1 000 but especially for the precious being nearly $30 000/oz from 650 650 metal mines: Eskom is their heart March through to May. 450 450 and lungs. Electricity constraints Palladium and platinum are 380 380 ‘95 ‘97 ‘99 ‘01 ‘03 ‘05 ‘07 ‘09 ‘11 ‘13 ‘15 ‘17 ‘19 ‘21 equal mining and refining currently at $2 400/oz and constraints, and days and $1 000/oz respectively after RESI eps in $ US revenue lost. These can never be hitting $3 000/oz and $1 300/ 3.9 3.9 3 3 regained. oz in May. But like gold today at 2 2 South Africa and South African $1 830/oz (down from $2 050 a mining were horribly hit by the year ago), these are all still great 0.85 0.85 COVID virus and subsequent prices for local producers. 0.6 0.6 lockdowns and greatly reduced And South Africa’s noneconomic activity. But the skyferrous bulk commodities high metal prices and demand – coal, heavy mineral sands 0.2 0.2 that followed in April 2020, and base metals – seem to be ‘95 ‘97 ‘99 ‘01 ‘03 ‘05 ‘07 ‘09 ‘11 ‘13 ‘15 ‘17 ‘19 ‘21 and are continuing today, have holding at their current “decadeprovided a hugely unexpected, high” price levels. Export coal is large and welcome bonanza. over $100/t, copper at $9 400/t and tin at $34 300/t. Ilmenite is at $380/t Government, especially the DMRE, should realise this is just a and zircon and rutile are both over $2 000/t. Fantastic prices indeed. temporary reprieve for South Africa’s beleaguered mining industry. So while share prices are discounting falling metal prices, the fact They must use this rare opportunity to devise and implement some that SA’s producers are still on 10-year-high margins bodes well for mining investor-friendly policies, before all these commodity prices dividend receipts for investors, rising coffers for company balance return to their long-term averages and lower. ■ sheets and great revenue and tax receipts for South Africa’s greatly in-





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