New life for SA’S small mining towns
Black shareholding, secondary industry plans play strong roles
THERE has been a piquing of interest in the mineral wealth of Northern Cape, the “Cinderella Province”, with 13 new iron-ore and manganese mines being opened in the past three years.
After 130 years, the diamond-mining industry is slowing down, leaving the province with many ghost towns as other industries have struggled to take root.
But, according to Mehmood Ahmed, head of the Industrial Development Corporation (IDC) Northern Cape, new life is being blown into the region, with housing developments popping up on every block and trucks travelling between bustling little towns again.
“Towns such as Kuruman, Kathu, Hotazel and Postmasburg can’t keep up with developments. The area is growing at a tremendous pace.”
The new mines all have a strong black shareholding and ownership model driven by a mandate from the government to transform the country’s mining industry.
A black consortium led by Clyde Johnson has reopened the Sedibeng iron-ore mine at Postmasburg, which was first mined in the 1960s.
The Cape Gannet Properties consortium, which includes 11 different entities, in 2007 revisited the deposit lying between two of South Africa’s biggest iron-ore mines — Kolomela and Beeshoek.
In a quest for capital, the consortium partnered with Indian conglomerate Tata Steel and the IDC. Tata put down R375-million for 64% of the Sedibeng iron-ore mine, and the IDC took out R290-million, of which R160-million went towards securing the black economic empowerment ownership.
Tata Steel senior geology and planning manager Nandakumar Lakshmipathy said he had spent the past five years in South Africa working on the project. He was later joined by general manager Sanjit Kumar Adhya and three other technical staff members.
“Tata had to look for new iron-ore mines when the company bought over the second-largest steel plant in Europe. We needed new mines to feed this $12-billion plant and the IDC showed us this deposit,” said Lakshmipathy.
The mine has produced two shipments of 340 000 tons since last October, and aims to produce two million tons a year by 2016.
However, when the Sunday Times
Houses are popping up and trucks travelling between bustling towns again
visited the mine recently, operations were at a standstill, with the two main crushers broken down and a change of contractors in process. Lakshmipathy did not seem concerned. “By tomorrow the crushers will probably be fixed and we still have a lot of stockpile that can be mined while we wait for new contractors. We expect that the new contractors will start in the next four to six months,” he said.
Even at top production, Sedibeng would be small compared with the neighbouring Beeshoek and Kolomela, which together produce about 100 million tons of iron ore a year.
“This was one of the bigger specs [in terms of iron-ore deposits] left in the region,” said Lakshmipathy.
Currently, none of the black partners is involved on an operational level at Sedibeng.
Ahmed pointed out that like diamond mining — which had left much of the province with a “bitter legacy” because the industry was too dependent on De Beers and struggled to develop beyond the business of mining — iron-ore and manganese mining were also primary industries that did not lead to secondary industries.
“As the IDC, we must encourage and fund manufacturing. It is a difficult task. Through the establishment of support industries in time it can be less dependent on mining when exhausted,” said Ahmed.
Mining is an important sector in Northern Cape’s economy. It makes up about 31% of the total economy while manufacturing contributes only 2.9% to the province’s gross domestic product.
Adding to the excitement around new mining activity are the renewable-energy prospects.
“Green projects are driven by South Africa’s decision to introduce renewable energy as part of our energy mix, and will help to drive alternative industry and developments in the medium term,” said Ahmed.
Northern Cape has the biggest potential to harness solar energy in South Africa, and 21 of the 47 renewable energy projects in the country have been allocated to it.
The province will also be home to the world’s largest telescope, the Square Kilometre Array, which is being built at Carnarvon.