PA L A B O R A M I N I N G C O M PA N Y
PALABORA MINING COMPANY
PMC Lifts Municipal and Provincial Economy PRODUCTION: Manelesi Dumasi
Since our last look at the massive Palabora Copper mine in Limpopo, much progress has been made with Lift II – the ambitious underground expansion project – and with engaging the Phalaborwa community. Manager: External Affairs and Communications, Lydia Radebe talks to Enterprise Africa about development on site. www.enterprise-africa.net / 3
INDUSTRY FOCUS: MINING
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Now is not an easy time for those involved in mining. Challenging local and global economic conditions, ongoing changes to technology and innovation, quality mineral deposits becoming more difficult to find, and an unending focus on safety and environmental issues make for a difficult sector to navigate. In South Africa, the situation is particularly concerning. The mining industry was the catalyst behind the growth of the country, but that is changing. GDP growth is not expected to exceed 1.4% in 2019. The economy has not grown significantly for almost a decade. Year-on-year statistics up to the end of March 2019 showed a 1.1% decline in overall mining production and commodity pricing, especially for copper and other base metals, is down. Earlier this year, a scientific research team from across Europe met in Slovenia to witness a new robotic mining machine, UX-1, head into old flooded mines in search of
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valuable minerals. The success of the project has prompted further interest and investment into automated mining equipment with the thought that human jobs could eventually be under threat. Platinum miners, many of whom have been on strike several times in the past three years, are set for further discussions with government to avoid industrial action which would force platinum prices upwards . These are just a few examples of threats and challenges facing modern miners. But it’s not all doom and gloom. Globally, mining is still a highly relevant industry, contributing to almost everything we consume every day and employing millions of people. Those that are happy to invest and those that are looking forward to an exciting future are the companies that are leading the industry forward. Despite the challenges, many are strongly positioned for further growth. In South Africa, one example is Palabora Mining Company (PMC).
Based in Limpopo, next to the Kruger National Park, and close to the border with Mozambique, PMC (also known as Palabora Copper) is the dominant employer of the region, home to a workforce of around 3700 people. The copper mine along with the smelter and refinery complex is a key link in the country’s copper supply chain, and a significant exporter to global markets. Operating since 1956, PMC (which takes its name from the town where it operates – Phalaborwa) is known globally for copper production and is also a significant producer of magnetite, vermiculite, sulphuric acid, anode slimes and nickel sulphate.
// PALABORA COPPER IS UNDERTAKING A LIFE-OF-MINE EXTENSION PROJECT KNOWN AS THE LIFT II //
PALABORA MINING COMPANY
LIFT II Currently, the mine is going through a life extension programme which will see it go further underground, taking life-of-mine through to 2033. Manager: External Affairs and Communications, Lydia Radebe tells Enterprise Africa more about the ongoing expansion project. “Palabora Copper is undertaking a life-of-mine extension project known as the Lift II. The project includes the magnetite reclamation and beneficiation study aimed at creating additional revenue from the 250 million-legacy stockpile. The company committed about R700 million to the pre-feasibility study and approximately R10 billion is expected to be spent throughout the development of the project.” After receiving investment from a
Chinese consortium in 2013, PMC was acquired by new owners and received a welcome flow of capital to restore ailing infrastructure. “To this end, the Chinese Consortium approved R10.4 billion to extend the life of mine to beyond 2033, R878 million to refurbish the smelter to ensure that Palabora Copper continues to produce copper rod, and R261 million to construct the floatation plant to improve copper recoveries, operational efficiencies and lower operational costs,” she says. Today, PMC is owned 80% by the consortium consisting of HBIS, Tewoo, General Nice and CADFund through Smart Union Resources South Africa. The balance is jointly owned by the South African government through the Industrial Development Corporation (IDC),
black empowerment consortium, PMC employees and communities. The owners knew that, with the local and global economic climate combined with the trends in mining, investment was needed. Without committing to upgrades and overhauls, the business faced mine closure and smelter shut down. Lift II is helping convert the mining method to a block-cave system. Block-caving sees the ore body undermined so to collapse under its own weight before being removed and treated. It is popular around the world and is especially useful when open-pit mining becomes too deep or expensive and operations must move underground. After the R9.3 billion was given the go ahead in 2015, a Palabora spokesperson said: “We’ve always
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INDUSTRY FOCUS: MINING
// WE’VE ALWAYS BEEN KNOWN AS SOUTH AFRICA’S PRINCIPAL PRODUCER OF REFINED COPPER AND THIS PROJECT ALLOWS US TO EXTEND THAT LEGACY FOR THE NEXT 20 YEARS // been known as South Africa’s principal producer of refined copper and this project allows us to extend that legacy for the next 20 years.” The 2000m wide pit drops more than 450m into the ground and produces more than 30,000 tons of copper each year. Currently on site at Palabora, work is underway to sink a new ventilation shaft. The new shaft will reach 1200m down and will be completed after new surface headgear and winders are installed in the first quarter of 2020. PHALABORWA For more than six decades, the Palabora Copper mine has been the heart of activity in the region. Mining has become the employment industry of choice for locals, and for commuters who travel from other regions to work for PMC. The company has also championed jobs for local people, work for local SMEs, economic development for Ba-Phalaborwa and Limpopo, and CSI investments that make a difference locally.
PMC has, for several years, been recognised by the Dutch-based International Top Employers Institute which highlights companies that go above and beyond to create sustainable and enjoyable workplaces for employees. “Our comprehensive independent research revealed that Palabora Mining Company provides exceptional employee conditions, nurtures and develops talent throughout all levels of the organisation and has demonstrated its leadership status in the HR environment, always striving to optimise its employment practices and to develop its employees,” the Institute said of PMC. Talking about all of the African companies to be included in the 2019 certification, Top Employers Institute CEO, David Plink said: “These companies help enrich the world of work with their outstanding dedication to HR excellence, and because of this, they are recognised as an employer of choice.” The company’s work in the local community is equally as impressive as Lydia Radebe explains: “Since 2013, the Chinese Consortium – through Palabora Copper – has spent more than R186,500 million in socio-economic development initiatives in Phalaborwa. “The smelter refurbishment project - smelter retrofit - and construction of the floatation plant are implemented in partnership with China’s Beijing General Research Institute of Mining and Metallurgy (BIGRIMM). In addition to technology transfer, BGRIMM has contractually committed to employ 90% of
unskilled labour and 80% of the semiskilled labour from the Phalaborwa and transfer new skills to Palabora Copper employees who work at the smelter to empower them to operate and maintain the refurbished smelter once completed.” As a result of the activity on site, there is also much spin-off work that is greatly assisting local companies to grow. Road construction, school renovation, infrastructure development, service provision, and community engagement programmes have all benefitted from PMC’s work. “In collaboration with the BaPhalaborwa Municipality and other strategic stakeholders PC established a road rehabilitation project which involves tarring of roads and streets in Namakgale,” says Radebe. “To date, Palabora Copper has collaborated with various
// IN COLLABORATION WITH THE BAPHALABORWA MUNICIPALITY AND OTHER STRATEGIC STAKEHOLDERS PC ESTABLISHED A ROAD REHABILITATION PROJECT WHICH INVOLVES TARRING OF ROADS AND STREETS IN NAMAKGALE //
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strategic stakeholders, including the Ba-Phalaborwa Municipality to rehabilitate Ackson Malatji road, Zakes Ngwasheng road and Maphutha Malatji road in Namakgale Township in Ba-Phalaborwa Municipality. The amount spent on the rehabilitation of these roads is over R44 million. “Palabora Copper has constructed nineteen bus shelters around the Ba-Phalaborwa Municipal areas to ensure that bus users wait for busses under the shade considering the heat in Phalaborwa. “Palabora Copper has renovated Block C of Matome Malatjie High in Maseke Village and painted Lepato High School in Makhushane to ensure that pupils study in a conducive environment,” she adds. Operationally, PMC is also endeavouring to become as environmentally friendly as possible and improve efficiencies. Copper mining is energy intensive and the company contends with a “forevergrowing, half-a-billion Rand energy
PALABORA MINING COMPANY
bill”. To help curb this situation, an Energy Management Programme and ongoing focus on quality processes are in place. “The company is a certified ISO 14001 business, that subscribes to world leading practices. Located directly adjacent to the worldrenowned eco-tourism attraction, the Kruger National Park, Palabora Copper coordinates several onsite wildlife management and cultural heritage programmes as part of its ongoing sustainability drive,” says Radebe. “PMC launched an Energy Management Program in 2012 collaborating with a consulting company resulting in the employment of 12 energy specialists and project managers that would, in conjunction with mining personnel, identify, implement and sustain energy cost saving projects. As a result, 117 initiatives were identified, and following stringent technical and financial adjudication processes, 31 projects were implemented. As a result of their Productivity Approach
over the past five years the company has saved R232 million through initiatives surrounding electricity, coal and liquid fuels, and water savings.” By the end of July 2017, the Energy Management Program had a net benefit of R173 million after external funding of R28 million was also factored. “PMC’s Energy Management Program has not only created a sustainable model making us energy efficiency leaders in the mining sector but has also emphasised our standpoint regarding their environmental responsibility,” adds Radebe. PMC is adapting to changing conditions. The future of mining will be totally different compared to what we know today. With the advent of the Fourth Industrial Revolution, this change will happen perhaps quicker than some may have expected. By extending the life of mine to 2033 at least, PMC has set the foundations for future development. And by investing in the local community that has been so vital to its success over the years, the
company now has loyalty and support from its key stakeholder group. “The company has written and developed its code of ethics to follow strategic imperatives which include: providing a safe and healthy work environment for all employees and contractor employees; practicing sound environmental management to ensure the sustainable biodiversity of the natural environment within which it operates,” says Radebe. The Palabora Igneous Complex still has a lot to offer and PMC is ensuring that value is extracted responsibly.
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