Young Man­ngwe Min­ing set to es­ca­late out­put

CityPress - - Business & Tenders - LESETJA MA­LOPE­lope@city­

Ju­nior min­ing firm Man­ngwe Min­ing is aim­ing to in­crease its iron ore out­put more than seven­fold within the next five years to al­most 5 mil­lion tons.

Speak­ing to City Press dur­ing the of­fi­cial launch of the com­pany’s R180 mil­lion Assen Iron Ore mine in Brits, North West, this week, Man­ngwe CEO Ma­todzi Nesongozwi said the com­pany, which started pro­duc­tion ear­lier this year, was set to mine about 700 000 tons a year.

The mine will pro­duce four grades of iron ore. It is cur­rently only pro­duc­ing de­tri­tal ore and is set to mine and blend the high, medium and low graded ore to client spec­i­fi­ca­tions.

ArcelorMit­tal SA CEO Wim de Klerk said the com­pany was proud of its part­ner­ship with Man­ngwe, a seven-year-old black-owned and black-run com­pany, and wanted to seal sim­i­lar deals with ju­nior min­ing houses.

“It was only last year that we got our black eco­nomic em­pow­er­ment part­ners,” De Klerk said.

ArcelorMit­tal SA spent R40 bil­lion a year on buy­ing dif­fer­ent com­modi­ties and only a few bil­lion rand of that went to “real black en­trepreneurs”.

De Klerk said that, out of all its providers, the deal with Man­ngwe gave ArcelorMit­tal SA the best qual­ity iron ore at the cheap­est rate, and he hoped the com­pany in­creased its pro­duc­tion as planned.

Ac­cord­ing to Nesongozwi, who is a min­ing en­gi­neer turned en­tre­pre­neur, the site in Brits was ac­quired from Kumba Iron Ore.

Aside from the share­hold­ers rais­ing some of the cap­i­tal them­selves, the An­glo Amer­i­can Sefa Min­ing Fund pumped R40 mil­lion into the project, half of which is a loan and the other half in eq­uity.

The off-take agree­ment with ArcelorMit­tal SA also ad­vanced a large amount, while DRA Min­eral Projects also came on board with a sig­nif­i­cant loan.

The An­glo Sefa fund was started in 2003 to in­vest in ju­nior min­ing com­pa­nies. In­di­vid­ual in­vest­ments range from R1 mil­lion to R30 mil­lion per project.

“ArcelorMit­tal SA wants to find an al­ter­na­tive mar­ket to their pre­dom­i­nantly North­ern Cape mar­ket, so it was also a good deal for the com­pany be­cause it means the ore is closer and cheaper,” Nesongozwi said, adding that the com­pany was truck­ing the ore to ArcelorMit­tal SA’s steel plant in Van­der­bi­jl­park.

The life of the mine is pro­jected to be 12 years and the breakeven point should be reached within 13 months.

“In the next five years, we should be able to sup­ply ArcelorMit­tal SA with a few mil­lion tons of ore from the north­ern re­gion [North West and Lim­popo],” Nesongozwi said.

He pointed out that, dur­ing the same pe­riod, Man­ngwe also wanted to ac­quire a num­ber of as­sets from ma­jor min­ing houses and green­fields.

“The price of iron ore is more than $65 per unit. Our de­liv­ered price is less than $35,” he said.

The com­pany also has plans to com­mis­sion a fea­si­bil­ity study within the next three years that will fo­cus on the pos­si­bil­ity of ex­tract­ing iron ore from the moun­tain­ous ar­eas near the mine.

The chair­per­son of Man­ngwe, Mathatha Tsedu, said that the mine em­ployed 220 peo­ple, in­clud­ing 50 from lo­cal com­mu­ni­ties. The area has an un­em­ploy­ment rate of more than 50% and a high rate of il­lit­er­acy.

Tsedu also said the mine would be build­ing a school for the lo­cal com­mu­nity in fu­ture and had, in the mean­time, man­aged to sup­ply trans­port for pupils.

“We are a com­pany that is aware of the en­vi­ron­ment in which we op­er­ate. The com­mu­nity around us is se­ri­ously de­pressed, so we will do what we can to gen­er­ate up­lift­ment in the area,” he said.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.