Ntsimbintle could build new mine
NTSIMBINTLE Mining could potentially build a new manganese mine in the central Kalahari basin near Hotazel, Northern Cape, if a feasibility study confirmed the viability of the project, the company said on Friday.
The construction of a new mine is a glimmer of hope amid uncertainty in South Africa’s mining industry that has been hit by commodity price volatility, disruptive labour strikes and a tough global economic environment.
“We received regulatory approval from the Department of Mineral Resources in June and if the feasibility study confirms the viability of the project, we could have a new mine, Mokala Manganese, in production in four years,” Ntsimbintle mining chairman Saki Macozoma said.
Manganese is an important ingredient in steel production, and South Africa holds the world’s biggest reserves of manganese ore.
An estimated 18 million tons of manganese is mineable from the Mokala project through open-cast mining, and there is scope of an underground mine from which additional ore can be mined.
“A new mine will be a boost for job creation and a new tax base for South Africa, as well as export opportunities for years of manganese production,” Macozoma said.
Ntsimbintle operates the R1.7 billion Tshipi Borwa, an open-cast manganese mine, near Kathu with 140 full-time employees and 900 contractors. The mine was opened in 2011.
South Africa’s manganese export doubled to 5 million tons in the past five years with a significant portion exported using rail.
Macozoma said getting the ore from the mine to Port Elizabeth for export had been a major challenge.
“About 75 percent of costs in manganese is transport taking the ore to the nearest port, which is 1 000 kilometres, was problematic”.
Tshipi Borwa is expecting to double its production from 1 million tons of manganese last year to 2 million tons this year.
Macozoma said Tshipi Borwa was a success story for empowerment.
“A number of black-owned companies are awarded with licences, but later sell them. We have managed to take the mine from a feasibility study to an operation that has a capacity to produce 2.5 million tons a year.” Brian Gilbertson’s Pallinghurst Resources, has a 49 percent stake in Ntsimbintle, and Australian listed OM Holdings holds a 20 percent stake in the company.
The company planned to be a low-cost producer against the background of a slowdown in demand for steel production in China, weak prices and the entry of new players.
Macozoma said: “Only lowcost producers can remain sustainable in this environment.”
At the time of the launch in 2011, Spoornet chief executive Siyabonga Gama said the company wanted to expand capacity on the line up from 7 million tons annually now to 12 million tons and as much as 22 million tons after 2017.