R1.7bn fluorspar mine in Gauteng under construction
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.
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.