R1.7bn fluorspar mine in Gaut­eng un­der con­struc­tion

The Star Early Edition - - NEWS - Di­neo Faku

A PRI­VATELY held com­pany is con­struct­ing Gaut­eng’s first new mine in 12 years and plans to be­come a global leader in flu­ourspar min­ing, a strate­gic min­eral used in in­dus­trial ap­pli­ca­tions rang­ing from plas­tics to glass.

The R1.7 bil­lion No­keng Flu­ourspar Mine, north east of Pre­to­ria, whose first pro­duc­tion is ex­pected in Fe­bru­ary 2019 and owned by SepFlour, plans to lever­age South Africa’s po­si­tion of be­ing home to 17 per­cent of the world’s flu­ourspar re­serves.

No­keng chief ex­ec­u­tive, Rob Wag­ner, told jour­nal­ists yes­ter­day that the com­pany had signed off­take agree­ments with three cus­tomers, who were set to pur­chase 40 per­cent of pro­duc­tion in the first three years of op­er­a­tion.

He said the 60 per­cent dif­fer­ence was ex­pected to be placed on the open mar­ket. Wag­ner said the com­pany’s pri­mary mar­kets would be in the US and Europe and it would ex­tend mar­ket share to In­dia and the Mid­dle East.

“We man­aged to sell the view to the off-tak­ers that the price of flu­ourspar will rise, which is un­usual, be­cause we are at the bot­tom of the price cy­cle. We were able to sign the agree­ments af­ter spend­ing 18 months on air­planes and tak­ing a face to face ap­proach to lur­ing in­vestors,” he said.

The con­struc­tion of the mine, which was an­nounced last month, comes as the min­ing sec­tor has been rocked by un­cer­tainty fol­low­ing the gazetting of the Min­ing Char­ter III.

Un­fazed

Wag­ner said the deal was closed days be­fore the char­ter was gazetted and lenders were cur­rently un­fazed.

He said fund­ing for the mine was a mix of debt and eq­uity by lo­cal and in­ter­na­tional in­vestors, in­clud­ing Ned­bank, adding that it had taken a long time to con­vince risk averse in­vestors on board amid the pol­icy un­cer­tainty.

“The lenders’ view at this stage is that the char­ter will not be im­ple­mented in its cur­rent form. We are eval­u­at­ing the im­pact of the char­ter and we do not have a prob­lem with its in­tent, but the is­sue is the time­line and method­ol­ogy,” he said. Wag­ner said the mine was in line with the char­ter re­quire­ment as it was 34.8 per­cent black owned and em­ploy­ees had 10 per­cent in share op­tions.

In terms of em­ploy­ment op­por­tu­ni­ties, Wag­ner said yes­ter­day that the mine was ex­pected to cre­ate 200 per­ma­nent jobs, in­clud­ing con­trac­tors, and 300 short­term jobs would be cre­ated in the con­struc­tion phase.

“We are only go­ing to em­ploy 143 peo­ple on the mine, the rest will be con­trac­tors and se­cu­rity. Our fo­cus is on build­ing in­fra­struc­ture and pro­vid­ing ed­u­ca­tion op­por­tu­ni­ties that will ben­e­fit the com­mu­nity,” he said.

Wag­ner also said that 40 per­cent of costs were likely to be trans­port, be­cause the prod­uct would be trans­ported by truck to the Richards Bay and Dur­ban ports.

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