JOHANNESBURG (miningweekly.com) – Global project management services company Tenova Mining & Minerals, which designs and supplies mining- and process-related equipment and provides mineral processing design, is mulling ways of breaking the mine funding deadlock that is preventing junior projects from proceeding.

Tenova Mining & Minerals president Walter Küng tells Mining Weekly Online in the attached video interview that the group is considering using its expertise and balance sheet to assist junior mining companies to raise bank finance.

Küng believes that getting junior and midtier miners up and running and generating cash deserves more attention and development than it is receiving.

“The projects are there but they don’t have traction to get off the ground,” says Küng.

Assisting in capital raising is “something we’ve been thinking about and may look at pretty seriously”.

Building plants on a lump-sum turnkey basis, which the company does 85% of the time, is itself a key driver of bank funding, as it guarantees the overall project price.

By catalysing juniors and banks to work together again, the company is hopeful that by the time the upturn comes, “some of these mines might be up and running and generating cash".

It believes it is able to assist in positioning juniors to fulfil most bank pre-conditions.

The 2 400-employee South African-headquartered Tenova Mining & Minerals has some R8-billion on its balance sheet.

THE NEW NORMAL

Brands under the Tenova Mining & Minerals umbrella include Tenova Bateman, Tenova Takraf, Tenova Bateman Technologies, Tenova Pyromet and Tenova Delkor and the group is active across a broad resources front, where it has traditionally pursued the opportunities presented by the capital expenditure (capex) on mining projects.

But the current forecasts of the mining majors indicate a capex decline over the next four to five years and Tenova now sees the ‘the new normal’ for the foreseeable future as being away from capex and towards optimisation of existing assets, improving efficiencies and intensifying after-sales service.

“This is what we are focusing on, besides chasing equipment sales, feasibility studies and EPCM (engineering, project and construction management) work,” he says.

The company has been “reasonably” successful in securing feasibility study work.

The company has proposed to a gold miner a novel way of recovering gold from tailings; it is engaged in diamond work in Botswana; it has upfront work at Baobab Resources in Mozambique; it has been awarded early project work by London Mining; it is undertaking a uranium feasibility study in Niger and it remains active at the Husab uranium project in Namibia.

“We’ve had to streamline our organisation on the EPCM side of things to keep the utilisation at a sustainable level. It’s really quite tough to make a penny out of cost-reimbursable jobs.

“In South Africa, it is probably fair to say that the cake is too small for all the service providers here, so we are trying to focus on the sub-Saharan African market more than anything else,” says Küng.

The equipment side of the business is doing well overseas and locally the company is benefitting from a conveying system award from synthetic fuel giant Sasol.

However, virtually all current Tenova Pyromet work is outside of South Africa.

“There’s very little pyro work here in South Africa, probably due to the shortage of electricity,” he added.

The company has $500-million worth of work on the go in Chile and is pursuing what it sees as “good prospects” in copper in Peru, which may involve its materials handling, mining and processing offerings.