Orion positive of mining future in SA

ORION Minerals, Australia’s junior exploration company that is scheduled to make a secondary listing on the JSE today, was confident about South Africa’s robust democracy, said Errol Smart, Orion chief executive and managing director.

“One thing I have been telling people around the world is something that sets South Africa apart from the whole of Africa is that we have a strong democracy. The constitution protects everybody, and we have a judiciary that defends everybody’s rights,” he told journalist and analysts during a visit to the mine.

“I think six months ago everybody was in fear that all was going to fail. I think over the past few months we have had proof that we have strong systems as opposed to Tanzania, where the president has taken away the mines. That is what gave me comfort as a South African to come back to South Africa and put my family back here,” Smart said.

ASX-listed Orion holds a 73.3 percent stake in the prospecting rights over the historic Prieska Zinc-Copper Mine, in Northern Cape, and the nearby Marydale Gold-Copper Project, after it acquired Agama Exploration & Mining in March.

The Prieska Zinc-Copper Mine was previously operated by Anglovaal, which employed 4 000 people and was shut in 1991, owing to heightened political tensions at the time.

The company said the JSE listing was part of a strategy of engaging South African capital markets, including access to the country’s large parastatal banks and funds.

“After the listing on the JSE… we will market the mine to institutional investors. No one has any idea of the potential of this project, because it has been in the wilderness for too long,” said Dennis Waddel, Orion chairperson. Zinc prices on the London Metal Exchange (LME) had rallied and last month reached a 10-year high of $3091 (R40888) a ton.

However, the listing of Orion comes as South Africa’s economy has emerged from a recession, and was bleeding thousands of jobs in the mining industry.

Moody’s Investors Service said last week that the country’s uncertain political and regulatory environments would fuel the restructuring trend in the mining industry. Smart was unfazed, saying he had managed to convince people across the world to put money behind the mine.

“We have exceptional deposits in South Africa and it will come right as soon as the regulatory environment has been worked out. I have comfort that it is going to happen. It will take time and will be painful,” Smart said.