Palabora Mining Company

PA L A B O R A M I N I N G C O M PA N Y

PALABORA MINING COMPANY

The Gold Standard

In Copper Mining PRODUCTION: William Denstone

Palabora Mining Company (PMC), also known as Palabora Copper, is South Africa’s foremost copper mine, located near to the Kruger National Park in the Limpopo Province. The mine is South Africa’s sole producer of refined copper and has remained operational ever since its incorporation in 1956, bringing together underground mining, concentrating, smelting and refining.

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INDUSTRY FOCUS: MINING

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Copper is a vital material, one which plays a crucial role in almost every home, office and vehicle not only in South Africa, but the world over. This recyclable metal is employed in a range of building and electrical applications but is particularly adept in renewable energy systems, as it is a highly efficient conduit, and is used to generate power from solar, hydro, thermal and wind energy across the globe. It is one of the best renewable resources as it is one of the few materials that can be recycled completely over and over again without a loss in performance.

Renewable energy sources now provide nearly one-quarter of the world’s power and their relevance increases daily for individuals and businesses alike: copper plays

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an important role in making it as efficient as possible with minimal impact on the environment, while its aesthetic qualities ensure that it stays popular in more creative pursuits such as art and construction.

COPPER PIONEERS Founded in August 1956, Palabora Mining Company is a publicly traded mining company headquartered in Phalaborwa, Limpopo province, ideally positioned both physically and in terms of its rich history of expertise to capitalise on copper’s growing national and worldwide importance.

Palabora was instrumental in the commencement of copper mining in South Africa, when it opened this, the country’s first open-pit copper mine, midway through the 20th century.

With its output of approximately

60,000 tonnes of copper per annum, Palabora is South Africa’s major producer of refined copper, providing some 85% of the domestic total. The majority of this product is supplied to the local market, with any excess then exported. Open-pit mining began at Palabora in 1964 and came to an end in 2002 when the pit reached its final economic depth. The development of an underground mine to access the ore remaining below the pit bottom commenced during open-pit production’s final years, costing in the region of $465m, to afford the prospect of a further 20 years’ life in the underground operation which thrives today.

Throughout the first phase of its long lifetime, Palabora was at the forefront of surface mining technology developments. A key feature was its

PALABORA MINING COMPANY

use of a trolley-assist system for haul trucks coming out of the pit, to save diesel, while it was also one of the early adopters of both in-pit crushing and computerised truck despatching.

The underground mine which followed is a block caving operation, and also a pioneer as the first such system to be used in metal mining in South Africa. Its development included driving around 36km of tunnels as well as the underground crusher stations, ore handling infrastructure and the undercut level for the first block cave, situated 500m below the final pit bottom.

UNIQUE PRODUCTION SCOPE Whilst copper forms the foundation of its business, Palabora also leads the way in mining and exporting other by-products such as magnetite, vermiculite sulphuric acid, anode slimes and nickel sulphate, and the company maintains subsidiaries in the UK, USA and Singapore to oversee its marketing of magnetite.

The company owes its origin to the unique formation known as the Palabora Igneous Complex.

Nowhere else is copper known to occur in carbonatites as is the case at Palabora, and a host of other minerals such as nickel, gold, silver, platinum and palladium also occur.

“The refinery produces continuous cast rod for the domestic market and cathodes for export,” outlines Lydia Radebe, Manager: External Affairs and Communications at Palabora, “alongside useful by-product metals and minerals including zirconium chemicals, magnetite and nickel sulphate as well as small quantities of gold, silver and platinum. Palabora operates a large block cave copper mine and

Leolo Community Trust P.O. Box 270 17 Hardekool Street Phalaborwa Tel: 015 781 0819 Fax: 015 781 0041 smelter complex with a production capacity of 30,000 tonnes of ore per day.” Palabora employs one of the most complex recovery circuits installed at any copper mine, producing eight metal, mineral and chemical products in around 20 different varieties and grades.

BACKED BY INDUSTRY GIANTS With Palabora’s long and complex history, we asked Radebe to delineate the ownership structure of the business today. “The mine is 80% owned by the Chinese consortium consisting of the

// SINCE ITS INCEPTION, PMC HAS BEEN AT THE FOREFRONT OF EMPLOYMENT PRACTICES IN THE LOCAL MINING INDUSTRY //

Hesteel Group Company Limited (HBIS), Tewoo, General Nice and CADFund through Smart Union Resources South Africa,” she clarifies.

“The remaining percentage is jointly owned by the South African government through the Industrial Development Corporation (IDC), black empowerment consortium, PMC employees and communities.

“Prior to this, Rio Tinto owned 57.7% and Anglo American had 16.8% of the shares,” Radebe continues. “In September 2012, the two companies announced their intention to sell their respective interests in Palabora and the following December, Rio Tinto announced that it has reached a binding sales agreement with a consortium which is committed to the on-going sustainable management of Palabora. The sale agreement

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INDUSTRY FOCUS: MINING

was concluded in July 2013, and the company’s name changed from Palabora Mining Company to Palabora Copper (Pty) Limited.”

NEW OWNERSHIP BREATHES NEW LIFE The acquisition of Palabora came in 2013 when the company was facing the choice between two possible scenarios, neither of which were at all desirable. “Without the interest of the consortium we were looking at either culmination of the life of mine or no overhauling of the smelter which was outdated and facing shutdown,” Radebe explains.

“Occurrence of the former

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would have resulted in the loss of employment of more than 3500 employees, while the latter would have required us to cut more than 700 staff from off-stream. Soon after the sale transaction, the new owners fostered partnerships between Palabora Copper and a range of Chinese companies in various areas such as economic development, trade, skills and technology transfers to achieve ground-breaking and substantive results in refurbishing and extending the life of the mine.”

This saw the Consortium approve R10.4 billion to extend the life of mine, R878 million to refurbish the smelter and R261 million to construct the

floatation plant to improve copper recoveries, operational efficiencies and lower operational costs.

MINING WITH A CONSCIENCE With Palabora Copper poised to tackle the next phase of its long and illustrious story, it is clear that the company is equally concerned with what it can offer to others as it is with providing the world with this precious resource. This care starts with its staff, and saw the company awarded the Top Employers South Africa certification this year.

According to the certifying body, “our comprehensive independent research revealed that Palabora Mining

PALABORA MINING COMPANY

// PALABORA MINING COMPANY NURTURES AND DEVELOPS TALENT THROUGHOUT ALL LEVELS OF THE ORGANISATION // Company provides exceptional employee conditions, nurtures and develops talent throughout all levels of the organisation.

“It has demonstrated its leadership status in the HR environment, always striving to

optimise its employment practices and to develop its employees.”

The company’s commitment to environmental preservation has led to the launch of its Energy Management Programme, which to date has saved R232 million through avoided energy costs and made it an energy efficiency leader in the mining sector.”

Radebe adds: “Over the years, we have invested more than R160 million in developing the communities through the Palabora Foundation, our community project execution partner.” She sums up how Palabora will cement its reputation as both a mining mainstay and a significant long-term driver of the

local economy. “Since its inception, PMC has been at the forefront of employment practices in the local mining industry.

“We have written and developed our code of ethics to follow numerous strategic imperatives and we strive to be a leading corporate citizen within the mining industry long into the future; supplying a high standard of quality products and services, both reliably and responsibly at national and global level.”

WWW.PALABORA.COM

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