Modern Mining April 2019

COMMENT

New projects a shot in the arm for embattled mining industry

I t’s common cause that the past several years have been among the most difficult ever encountered by the mining industry in the Southern African region. In par- ticular, there’s been a dearth of the type of big capital projects that sustain the many companies that provide services and equip- ment to the mining sector – from big EPCM contractors at one end of the spectrum to the suppliers of dump trucks, drill rigs and roof bolters at the other. Although it would be premature to say that this situation is reversing, there’s certainly been some encouraging announcements on new projects recently that suggest that mining companies are starting to regain an appetite for investment in ‘greenfield’ mines or in the expansion or extension of existing operations. Top of the list is the long-awaited Cut-9 project at Debswana’s flagship Jwaneng dia- mond mine in Botswana, which has now been launched and which will extend the mine’s life to 2035 (see page 9). Debswana will be investing a mammoth US$2 billion over the life of the project, which is primarily a huge earthmoving exercise. The mining contract has been awarded to the Majwe Joint Venture, a partnership between Thiess, part of the CIMIC Group, and its long-time partner in Botswana, Bothakga Burrow Botswana. Majwe, which used to include Basil Read Mining, was respon- sible for Cut-8 at Jwaneng. A second big project which has recently been announced and which is due to kick off in the middle of this year is Zulti South (see page 5) in South Africa. This new mine will cost US$463 million to develop and will ensure that Richards Bay Minerals (RBM), majority- owned by Rio Tinto, can sustain its mineral sands business into the future. RBM’s operations started up in the mid- 1970s and the company’s activities are now crucial to the economy of the Richards Bay area, and indeed of KZN, so the news of this major investment will, I think, be widely wel- comed. Certainly Gwede Mantashe, Minister of Mineral Resources, has responded positively to the announcement, saying recently that the decision to go ahead with Zulti South was an affirmation of South Africa’s attractiveness as an investment destination (although I think there are many in the mining community who would not entirely agree with this assessment). Moving back to Botswana, US-based Cupric Canyon has said that it has secured funding for its Khoemacau copper/silver project in the

Kalahari Copperbelt, a story which we reported on in our March issue. The company intends spending nearly US$400 million to get the first phase of development – what it calls the ‘Starter Project’ – off the ground and intends following up with a second phase which will see ore pro- duction increase from 3,6 Mt/a to 5,8 Mt/a. As I mentioned in this column three months back, Khoemacau – which will be an under- ground operation – is likely to be joined by a second mine in the Kalahari Copperbelt, the T3 open-pit project of MOD Resources which will involve a capex of US$142 million. MOD – which has just completed a Feasibility Study on T3 (see page 10) – has not yet given formal approval to T3 but there seems little doubt that it will be going ahead. MOD, in fact, is talk- ing of being in production in 2021, which is the same year that Khoemacau should com- mission. Between them the two mines will have an initial annual production of around 90 000 tonnes of copper. Apart from Zulti South, I’m not aware of any other major projects in South Africa that have been approved within the last few weeks but there are several significant projects that could get the nod within the next few weeks or months. These include Phase 2 of the Gamsberg zinc mine in the Northern Cape, likely to cost in the region of US$400 million, and the main shaft (Shaft 2) of the Platreef project in Limpopo Province, which will involve a very major investment – quite how much, I’m not certain – by Ivanhoe Mines and its partners. There are also a couple of Exxaro projects, nota- bly the R3,2 billion Thabametsi coal project in the Waterberg and the R1,8 billion relocation of Mine 1 of the Matla coal mining complex, which could possibly move into execution. The projects I’ve mentioned above col- lectively add up to well over US$3 billion. On their own, they’re not enough to signify a strong upturn in mining but they’re very wel- come nonetheless and are, hopefully, a pointer to better times ahead. The upcoming developments in Botswana are particularly exciting, given the bleak times that country’s mining industry has experienced in recent years, notably the closure of all BCL’s operations in Selebi-Phikwe and at Tati Nickel and the consequent loss of thousands of jobs. With Cut-9 and Khoemacau both now enter- ing implementation, and T3 looking like a sure thing, the future of mining in the country is looking brighter than it has for years. Arthur Tassell

The upcoming developments in Botswana are particularly exciting, given the bleak times that country’s mining industry has experienced in recent years.

April 2019  MODERN MINING  3