Beneficiation ‘needs surety on electricity’

2011-09-17 13:41

Abundant electricity and clarity on what it would cost were pre-requisites for the formation of downstream beneficiation industries related to mining, according to Saki Macozoma, chairperson of the Tshipi e Ntle manganese group.

Tshipi e Ntle, a new player in South Africa’s manganese sector, this week held the ceremonial sod-turning ceremony at its Borwa development, located next to Samancor’s Mamatwan mine near Hotazel in the Northern Cape.

The mine, which boasts a 163 million tons resource base, aims to produce 2.4 million tons per year for 60 years, with the first manganese scheduled for production in the second half of next year.

The ore will be drilled, blasted and crushed to produce “fines” and “lumpy products” before being railed and shipped for further processing abroad.

“I associate with the view that we shouldn’t simply be digging and shipping our minerals, but beneficiation also has to make economic sense,” said Macozoma.

“There is the electricity issue as well, which has to be sorted out first before you can talk about any beneficiation.

“Eskom needs to get the pricing right and supply secured. That is a long-term problem that cannot be settled in the next few years.”

South Africa’s New Growth Path policy targets 140 000 more mining jobs by 2020, underpinned by the establishment of downstream beneficiation industries.

Cabinet subsequently adopted the department of mineral resources’ beneficiation strategy in June. The department would have to submit concrete proposals on beneficiation in October.

Asked whether Tshipi would consider processing manganese ore in South Africa, for instance into a sinter product, company director Moss Ngoasheng said the country had only a few users of ferromanganese.

“Sinter products don’t travel well,” said Ngoasheng. “The loss of product is high. Hence you’ll find people will be sintering close to the
end user.”

Most of the ore from Borwa would be taken up by Tshipi’s major shareholders. Australian-listed and Singapore-based OM Holdings, a manganese producer and marketer, would take up about half of Borwa’s output. OM Holdings holds a 26% stake in Ntsimbintle NewCo, which for its part has a 50.1% share in Tshipi e Ntle.

Pallinghurst’s Jupiter Mines, which owns the remaining 49.9% in Tshipi, has an offtake agreement with South Korea’s Pohang Iron & Steel Company for about 20% of total output. The remaining 30% would be sold on the spot market, Macozoma said.

In contrast to Tshipi e Ntle’s model, Kalagadi Resources – also a Northern Cape manganese junior – will be mining three million tonsthree million tonnes of ore a year, to be converted into 2.4 million tons of sinter product close to the mine.

This would be railed to Coega, where a smelter would convert 700 000 tons per year of sinter product into high-carbon ferromanganese.
ArcelorMittal has a 50% offtake agreement for both products. 

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