Tharisa takes full control of mine
• Company to buy equipment and hire 900 workers as contractor operations come to an end at Brits asset
Tharisa Minerals is buying the fleet of equipment and employing the staff deployed by MCC Contracts at its chrome and platinum group metal mine near Brits as the company takes full control of a maturing asset.
Tharisa Minerals is buying the fleet of equipment and employing the staff deployed by MCC Contracts at its chrome and platinum group metal mine near Brits as the company takes full control of a maturing asset.
Avoiding the high upfront cost of buying a mining fleet and employing a large staff complement, Tharisa opted to use a contractor to start its opencast mine. However, now that the mine is at steady state production, the company has opted to take a firmer hold of the operational side of the business. Aiming for 1.4-million tonnes of chrome concentrate and 150,000oz of platinum group metals in 2017, Tharisa said taking in-house control would allow it to hit that target. It said in May it intended embarking on this course of action.
“The contractor model was appropriate while the Tharisa Mine was in development since it reduced the upfront capital spend on a fleet, enabled Tharisa Minerals to understand its ore body fully and allowed the company to determine the optimal fleet requirements for mining its specific ore body,” said Tharisa CEO Phoevos Pouroulis.
At the start of October, 900 MCC staff will go onto the Tharisa payroll, lifting the staff complement to 1,700 to exploit 18 years of open-pit mining and an extra 40 years of underground mining. “The company has secured the necessary funding through bridge loan facilities and original equipment manufacturers’ finance to fund the purchase. As part of the agreement, Tharisa Minerals will also take cession and assignment of certain leases currently entered into by MCC Contracts,” Tharisa said. Tharisa will spend R303m to buy the equipment as well as all spares, tools and machinery bits needed to operate the fleet.
It will spend a further R110m on buying drill rigs, excavators and trucks. The transaction would lift the size of the mining fleet to 19 drill rigs, 11 excavators and 46 trucks, giving Tharisa the ability to move 17-million cubic metres of material a month.
The fleet is old, however, and Tharisa will start replacing some machines in 2017.
This will cost R120m of the 2018 financial year’s capital expenditure. The full replacement price of the fleet Tharisa is buying for $23m is $145m. Tharisa has a bridge loan facility of R250m, or $19m.