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Hawkish govt sentiment intensifying ahead of mining law amendments

President Jacob Zuma and Susan Shabangu
Daphne Mashile-Nkosi
Ebrahim Patel

Kalagadi Manganese executive chairperson Daphne Mashile-Nkosi tells Mining Weekly Online’s Martin Creamer that developmental finance institutions have given the company sufficient funding tenure to allow for development. Photographs: Duane Daws. Video: Shane Williams and Nicholas Boyd: Editing: Shane Williams.

President Jacob Zuma and Susan Shabangu

Photo by Duane Daws

Daphne Mashile-Nkosi

Photo by Duane Daws

Ebrahim Patel

Photo by Duane Daws

3rd December 2013

By: Martin Creamer

Creamer Media Editor

  

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JOHANNESBURG (miningweekly.com) – Hawkish government sentiment is intensifying ahead of the enactment of amended minerals legislation.

This was clear at the weekend when both President Jacob Zuma and Minerals Minister Susan Shabangu advocated reform of the South African mining industry with far greater force than they have done in the past.

They did so from the same podium at the politically charged function to mark the launch of Kalagadi Manganese’s integrated mine, sinter plant and planned smelter, which they held up as a future model.

Government is making it clear, on the eve of the auditing of the Mining Charter, ahead of the April deadline, that it will be taking no prisoners.

Shabangu said bluntly that there was no place in South Africa for mining companies that refused to transform in the manner that Kalagadi Manganese was showing could be done.

“It’s either you are with us or you ship out,” the Minerals Minister said hawkishly, and ominously in view of the intense current industry discussion under way ahead of the imminent potential enactment of far-reaching legislative amendments to South African minerals legislation.

“This is a landmark project that boosts our National Development Plan,” said Economic Development Minister Ebrahim Patel.

“Here is a heroine,” said Zuma.

“Daphne has shown that it can be done,” said Shabangu.

“No raw ore will leave this place,” Mashile-Nkosi told the politicians.

Just back from an official visit to Ghana, the President said mineral beneficiation was the strong new rallying cry of the African continent.

“Beneficiation is the way the whole of Africa has to go,” Zuma commented, adding – seemingly in jest, but then many a true word is spoken in jest – that he had instructed Shabangu to make beneficiation a condition of mining licence awards.

Both were inspired by Kalagadi Manganese executive chairperson Daphne Mashile-Nkosi, a black South African mother of four and grandmother of three, whom they hailed as a heroine of the modern day struggle for economic freedom and the emancipation of women in mining at global scale.

Mashile-Nkosi cofounded the project with her late husband, struggle veteran and former Robben Island political prisoner, Stanley, refusing to back down in the face of seemingly impossible project odds, pressing on despite a troubled partnership with a multinational and even litigation.

She did not complete her matriculation at the Sekano Ntoane High School in Soweto in 1976 because she had become immersed in the epoch-making Soweto student uprising of June 16, which is today commemorated as Youth Day, a South African national holiday.

The visiting politicians lauded her delivery of an integrated manganese beneficiation project - in the teeth of the worst global financial crisis since the Great Depression as well as losing her husband and partner in the midst of project difficulties - plus her determination to crown her achievement with a manganese smelter in the Eastern Cape.

The manganese sinter plant, which has already been put through its paces, will resume next year once a failed transformer has been fixed, Kalagadi projects head George Maluleke told Mining Weekly Online.

Kalagadi Manganese chief financial officer Sello Motau put investment at the Hotazel complex to date, including the development of the underground mine and infrastructure, at R5.3-billion, the sinter plant absorbing R1.6-billion of that.

The water reservoir holds 17-million litres, the power lines have a capacity of 11 kVA, the mine-built roads cover 9.8 km and the rail link extends over 18.6 km.

The underground ore has manganese content of 37% to 38%, which the sinter plant will enhance to 47% and 48%.

The mine shaft, which descends to a depth of 281 m, has been named after the late Thembeka Myedi, a woman who participated in the Kalagadi Development Trust for the empowerment of women in the area and helped to set up an education trust that has produced its first doctoral student.

SMELTER CONSTRUCTION

Plans to construct the manganese smelter were well advanced, Kalagadi Manganese COO Thulo Malumise told Mining Weekly Online, adding that funding discussions were under way with leading international development finance institutions (DFIs) to finance the smelter, for which procurement was expected to begin in the third quarter of 2014.

Strong financial backing has been ongoing from South Africa’s State-owned Industrial Development Corporation, which holds 10% of the shares and which is keen to promote optimum beneficiation.

Four 63 MVA furnaces are expected to be procured initially, with provision made for an additional two furnaces that could be included at a later date.

Export Credit Agency furnace funding is being sought, which may be secured with the help of UniCredit Bank AG.

Malumise said the DFIs were showing keen interest in the complex because of its beneficiation offering as well as its unique African characteristic of being women-led.

He said that, once in steady state, the complex would employ between 700 and 800 people permanently. During construction it had created 7 400 direct jobs.

The resolve of the politicians on both transformation and beneficiation came to the fore after they had walked the corridors of her sinter plant and observed the power, water, rail and road infrastructure in place on the shifting sands of the Kalahari at Hotazel, in the Northern Cape.

If this woman can do it from scratch against such great odds, longer-established and better-heeled South African mining companies must be compelled to beneficiate and transform, they said in their subsequent speeches.

Both refused to pull any punches, significantly at a crucial time of amendments to the Mineral and Petroleum Resources Development Act Amendment Bill, many of which have evoked strong opposition.

The President’s singling out GlencoreXstrata for special praise could also be construed as the head of State letting those already in South Africa know that huge resources multinationals were prepared to nail their colours to the South African mast despite all the opposition mining companies already in the country were generating.

He also went on to deal a heavy blow to the South African mining establishment when he spoke of the Big Hole of Kimberley, which is in the same province, being “a painful reminder” of the way in which mining should never again be allowed to be done.

Edited by Creamer Media Reporter

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