SA Mining January/February 2022 by SundayTimesZA

R229bn: Mining’s contribution to govt revenue

R150bn: Value of mining equipment exports

SA MIN NG JANUARY / FEBRUARY 2022

www.samining.co.za

READ WHAT REALLY GOES DOWN IN SADC R39.90 (incl VAT) International R44.50 (excl tax)

NSDV director and co-founder Lili Nupen

GREEN AGENDA

New legislation takes effect

DRIVING BENEFICIATION ■ State Diamond Trader ■ De Beers ■ Belgian Embassy

NSDV REBRANDS

MEMSA Increases industry interaction

Targets multiple stakeholders

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CONTENTS JANUARY / FEBRUARY 2022

28 Diamond trading, Belgium and Africa.

IN BRIEF 6 8

First Quantum Minerals appoints Tristan Pascall as next CEO Kangra extends LOM beyond 2031 Vanderschuren – SAICE’s new president

FEATURES 16

SDT drives beneficiation agenda The State Diamond Trader is rolling out key initiatives in 2022, including a diamond and precious metals hub at OR Tambo International Airport’s SEZ, says CEO Mandla Mnguni.

De Beers grows beneficiation pipeline De Beers’ Paul Rowley outlines the company’s plans to grow the diamond beneficiation pipeline.

Central Copper Resources advances Mbamba Kilenda CCR progresses its Mbamba Kilenda copper project, aiming for production within a year of project approval, says COO Kevin van Wouw.

Energy crisis – what to expect in 2022.

MEMSA targets increased industry interaction MEMSA is driving the agenda to help the mining industry’s OEMs address some of their challenges, says CEO Lehlohonolo Molloyi.

African oil and gas in the spotlight. R229bn: Mining’s contribution to govt revenue

R150bn: Value of mining equipment exports

SA MIN NG JANUARY / FEBRUARY 2022

www.samining.co.za

SGB-Cape launches QuikDeck In response to increased demand for innovative access solutions, SGB-Cape has launched QuikDeck. Green agenda – new legislation takes effect The FSE’s Mariette Liefferink flags key environmental concerns currently facing the country and the measures to resolve them.

NEWS IN NUMBERS 28 42

R229bn: Mining’s contribution to government revenue R150bn: Value of mining equipment exports

REGULARS 4 50

Out of Africa Column by Peter Major

COVER STORY: PAGE 10

READ WHAT REALLY GOES DOWN IN SADC R39.90 (incl VAT) International R44.50 (excl tax)

GREEN AGENDA

NSDV director and co-founder Lili Nupen

New legislation takes effect

DRIVING BENEFICIATION ■ State Diamond Trader ■ De Beers ■ Belgian Embassy

NSDV REBRANDS

NSDV repositions itself as an integrated advisory and legal solutions business for the mining and related sectors, says director Lili Nupen.

MEMSA Increases industry interaction

Targets multiple stakeholders

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FROM THE EDITOR

SA MIN NG

2022

www.samining.co.za

READ WHAT REALLY GOES DOWN IN SADC

A YEAR FOR CAUTIOUS OPTIMISM

Stacey Visser Tel: 011 280 3671 Email: vissers@businessmediamags.co.za

on the power producer and go a long way towards meeting the industry’s commitment to achieving net zero carbon emissions by 2050. According to CEO Roger Baxter, renewable energy projects in the mining sector would ease the pressure on Eskom to the benefit of other industries and the country as a whole. “These projects must be expedited through a smart tape system. Environmental authorisations take too long and should be materially shortened. In addition, policy issues related to wheeling charges and surplus offtake to other users are required,” he said. The mining industry is involved in various stages of the process leading up to building plants of renewable solar, wind and battery energy projects for up to 3 900MW. The council pointed out that electricity prices had increased more than six-fold over a decade and were now the second largest cost component after salaries for deep-level and electricity-intensive mines. The renewable projects in total would account for about a third of the mining sector’s annual electricity consumption, it said. Energy is also an important topic featuring in this edition – research house Afriforesight’s head of energy commodities, Vinesh Chetty, unpacks the cost of load shedding to the mining industry (pg 32) while Bonginkosi Sithole, MD of Rand Heavy Industries, shares insight on the impact of the energy crisis on business and the economy at large (pg 28). Further to this, In On Africa’s Ogi Williams provides guidance on the oil and gas industry and the soaring fuel costs (pg 30). Also in this edition is a story on copper developer Central Copper Resources, which is hogging the sweet spot as it progresses its flagship Mbamba Kilenda copper project, aiming to be a producer in the very near future (pg 26). The spotlight is also on diamonds – with the State Diamond Trader’s CEO Mandla Mnguni pointing to how it is progressing its beneficiation agenda, while diamond miner De Beers Group’s Paul Rowley advises on the measures the company has in place to grow the diamond beneficiation pipeline (pg 18). For our cover story, NSDV, we chatted to director Lili Nupen, who highlighted the company’s recent rebranding exercise. The rebranding clearly repositions the company “as an integrated professional services entity, as opposed to merely a law firm”. (pg 10). ■

R60-billion

Value of 3 900MW of renewable energy projects

SA MINING

JANUARY / FEBRUARY 2022

Nelendhre Moodley Tel: 011 280 5782 Email: moodleyne@samining.co.za

ONLINE EDITOR

Nelendhre Moodley

autiously optimistic – a term often used by CEOs during results presentations. But to be fair, given the continued mutations of the coronavirus over the past two years, most people are certainly not overly optimistic about what the future holds. While the latest Omicron variant dashed hopes of great festive cheer, its symptoms are milder, in comparison to the Delta variant, bringing with it the hope that future variant mutations would have a less severe impact on people. However, institutions such as the International Monetary Fund (IMF) were quick to revise the economic outlook downward for 2022, signalling a much bleaker forecast. In December, the IMF’s managing director Kristalina Georgieva told a virtual conference that the new variant was likely to lead to some downgrades for global growth. American multinational investment bank and financial services company Goldman Sachs subsequently downgraded the United States GDP growth forecast to 3.8% from 4.2% for 2022. According to the World Health Organization, the COVID-19 global death toll at the beginning of December stood at a staggering 5.26 million and 5.5 million by early January 2022. The turmoil stemming from the pandemic has had far-reaching consequences – from hampering supply chains and causing severe delays in shipping to soaring unemployment rates. Thousands of people continue to lose jobs as the latest coronavirus variant rings the death knell for more companies. The country’s high rate of unemployment – a staggering 34.9% – in the third quarter of 2021 added to South Africa’s woes as it shed more than half a million jobs. In line with expectations, South Africa’s GDP decreased by 1.5% in the third quarter of 2021, with the trade, catering and accommodation industry logging decreases of 5.5% and the manufacturing industry tracking a 4.2% decrease. On a positive note, Minerals Council South Africa members have agreed to help embattled power producer Eskom with a critical buffer and proposed off-setting some of the demand with own-generated power. The council said its members had 3 900MW of renewable energy projects worth an estimated R60billion in mind, which, if built, would relieve pressure

EDITOR

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ART DIRECTOR

Shailendra Bhagwandin Tel: 011 280 5946 Email: bhagwandinsh@arena.africa

ADVERTISING CONSULTANTS

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SUB-EDITOR Andrea Bryce

BUSINESS MANAGER

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OUT OF AFRICA MALI

BURKINA FASO

AIM-listed Kodal Minerals has been granted a mining licence for its flagship Bougouni Lithium Project in Mali. The project is now fully permitted for development, having already received environmental and social impact assessment approval in 2019. Bernard Aylward, CEO of Kodal Minerals, says: “The granting of the mining licence for Bougouni has come at a great time for Kodal with the increasing global focus on battery metals and the recognition of potential supply deficits highlighting the value of our fully permitted Bougouni Lithium Project. “We are looking forward to the construction phase of this project and we are confident of achieving support to finance the capital required for our target of development of the first lithium mine in Mali.”

LIBERIA

West African gold explorer Sarama Resources recently announced a significant increase in mineral resources for its Sanutura Project in south-west Burkina Faso. This follows an updated interpretation and re-estimation of mineral resources at the Bondi Deposit, located to the north of the project’s main Tankoro Deposit. The Sanutura Project is an advanced-stage exploration project covering some 1 500km and hosting a significant, welldefined mineral resource base and a suite of exploration targets, the company says. The updated mineral resource estimate now stands at 9.4mt @ 1.9g/t Au for 0.6moz gold (indicated), plus 52.7mt @ 1.4g/t Au for 2.3moz gold (inferred). According to Sarama’s CEO Andrew Dinning, the project is being positioned as a long-life, multi-stage asset.

Gold miner Hummingbird Resources has announced an updated mineral resource estimate (MRE) of 3.40moz in measured and indicated mineral resources for the Dugbe F and Tuzon deposits of the Dugbe Gold Project in Liberia. This is a 1moz increase from the last MRE update. Hummingbird Resources has a controlling interest in the Dugbe Gold Project which is being developed by Pasofino Gold through an earn-in agreement. Dan Betts, CEO of Hummingbird Resources, says: “Of the total updated 4.0moz resource base, 3.4moz is in the measured and indicated category, which is a significant uplift on the previous MRE.”

GHANA Gold explorer Asante Gold remains on track to bring its Bibiani Mine into production in Q3 2022. The company is preparing to deliver a mine that can produce around 190 000 ounces of gold at Bibiani in its first 12 months of operation and about 240 000 ounces every year thereafter for a minimum of six years. Tenders have been invited for the selection of a mining contractor. The company anticipates mobilisation of the mining contractor to proceed in Q1 2022. Harlequin International has been contracted to complete the refurbishment engineering, procurement and construction management (EPCM) and has mobilised as scheduled. The full EPCM team, plus requisite complement of tradespeople, is onsite to provide the training, safety and project delivery systems and resources needed to ensure the achievement of a safe and productive work environment.

SA MINING

JANUARY / FEBRUARY 2022

ETHIOPIA AIM-listed KEFI Gold and Copper has recommenced site preparations for the Tulu Kapi Gold Project, including district inspections by assessors for the financing syndicate and consultations with the community. The company is set to start mining and plant commissioning in late 2023. The Ethiopian Ministry of Mines recently confirmed that the mining licence was in good standing to 2035 subject to KEFI’s confirmation of project finance procurement by 31 January 2022, which remained on track at the time of publication, the company said.

www.samining.co.za

IN BRIEF

FIRST QUANTUM MINERALS APPOINTS TRISTAN PASCALL AS NEXT CEO

KANGRA’S LOM EXTENDED BEYOND 2031 Coal mining company Kangra, a subsidiary of mining investment company Menar, is nearing completion on the construction of the Twyfelhoek Adit, which forms part of the Kusipongo coal reserve. Kangra mine is located in Saul Mkhizeville in Mpumalanga province. Construction began in early April 2021. First coal is expected by the first quarter of 2022, the company says. The company allocated a capital budget of R153.6-million to establish the shaft. The access road to the adit was completed on 13 September 2021 and the powerlines and the water reticulation connection were completed by midDecember 2021. Kangra also invested in new and reconditioned mining equipment to the value of R45m to mine the Kusipongo reserves. As part of the mine’s Social and Labour Plan (SLP) commitments, a project will commence in the first quarter of 2022 to supply water to the Donkerhoek community. Kangra will invest around R20m into the SLP commitments for the next five years. “The Kusipongo reserve is located to the west of the existing mining operation and is a natural extension of Kangra’s current coal resource. It has a coal reserve of around 41.9 million tonnes and could potentially extend the life of the mine by more than 20 years,” says Kangra GM Pierre Louw. Kangra is targeting a production rate of 1.44mtpa from the underground mining sections and 360 000tpa from the opencast areas for the LOM.

SASOL WINS ESG LEADER AWARD

First Quantum Minerals will appoint Tristan Pascall as its next CEO – effective in early May 2022. Pascall is currently the company’s chief operating officer and will replace Philip Pascall when he retires. “We believe Tristan’s combination of operational, strategic and capital markets experience, as well as the strong stakeholder relationships he has developed, are fundamental to the continuity of our unique core capabilities, namely industry-leading project execution and operational excellence,” says Robert Harding, lead independent director.

THARISA EXTENDS LOM TO 2041 Platinum group metals and chrome co-producer Tharisa has extended the open-pit life of mine at its flagship Tharisa Mine by an additional seven years to 2041. This follows a review of its Mineral Resource and Mineral Reserve statement, the company says. Phoevos Pouroulis, CEO of Tharisa, says: “Following an annual review of the company’s Mineral Resource and Mineral Reserve, Tharisa Mine’s open-pit mining will continue through to 2041, seven years longer than previously indicated. “This development further cements the reputation of the Tharisa Mine as a world-class, long-life asset that underpins our business and will continue to provide a sustainable, lowcost platform for over 50 years.”

Petrochemicals giant Sasol has won the ESG Leader Award at the inaugural annual Africa Energy Awards 2021. This is in recognition of the progress the international integrated chemicals and energy company has made in increasing capital investments towards ensuring safe and fair operations through improvements in environmental, social and governance performance. Organised by the African Energy Chamber, the awards seek to promote the accomplishments of African energy companies and professionals. “To be recognised for our ongoing efforts to be a net zero emitter of greenhouse gas emissions (GHG) by 2050 and our 30% GHG reduction target is a really encouraging experience,” says Bernard Klingenberg, Sasol executive vice president: energy operations.

SA MINING

JANUARY / FEBRUARY 2022

www.samining.co.za

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IN BRIEF

VANDERSCHUREN SAICE’S NEW PRESIDENT The South African Institution of Civil Engineering (SAICE) recently welcomed its 119th president, Prof Marianne Vanderschuren. Vanderschuren is the third female president in SAICE’s history, following in the footsteps of Dr Allyson Lawless and Prof Elsabe Kearsley. In recent years, SAICE has strived to promote diversity and inclusion in the civil engineering industry.

Michelle Fedder, Ralf Hennecke and Ramesh Dhoorgapersadh.

BME WINS INDUSTRY AWARD FOR SAFE DISPOSAL OF USED OIL

Omnia group company BME has been recognised by the Chemical and Allied Industries’ Association (CAIA) for its contribution to a cleaner environment – winning the CAIA Responsible Care Initiative of the Year Award, in the company projects: Category A segment. The award was for BME’s incorporation of used oil as a base product for its emulsion explosives, removing the risk that this oil could contaminate water or soil. Ramesh Dhoorgapersadh, BME’s general manager for safety, health, environment and quality, says the initiative reflects the company’s close collaboration with customers – where used oil from large mining customers is also collected and used for repurposing and responsible disposal through the blasting process. These partnerships have been initiated in Africa and are being rolled out to BME’s global network of operations.

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FINANCE & LEGAL COVER STORY

NSDV REBRANDS Targets multiple stakeholders

By Rodney Weidemann

SA MINING

referred to us in this manner anyway. Our new corporate colours are designed to imply a business that is very approachable, easy to talk to, and fun to work with. I like to think we also exude a level of ‘feminine’ energy that stands out significantly in the broadly masculine world of mining. These are all attributes that are sorely lacking in the legal and mining industries.”

“

JANUARY / FEBRUARY 2022

A NEW SCHOOL OF THOUGHT

She notes that it is because of this new approach and the strong relations built prior to rebranding that the company has experienced significant recent growth. “The key aspect of the new NSDV is that we have repositioned ourselves as an integrated advisory and legal solutions business for the mining and related sectors. >

“

aw firm NSDV has rebranded itself as an integrated professional services entity, providing services across the mining, environmental and construction industries. The mining industry – and even more so, the law firms that service it – have long had a reputation for being staid and by the book, an image reinforced by their penchant for suits, shag carpets and mahogany panelling. That has all changed with the recently rebranded NSDV (formerly Nupen Staude de Vries), a boutique specialist firm with an alternative approach, in that it not only advises on legal risks and problems, but also offers pragmatic business solutions based on its wide-ranging management experience. According to NSDV director and cofounder Lili Nupen, the aim of the company’s rebranding exercise is to position the business as an integrated professional services entity, as opposed to merely a law firm. “NSDV’s customers are particularly drawn to our organisation’s youth, its new ideas, and the staff’s personable approach to matters. NSDV also aims to be different to mining’s more traditional and old-school feel by adopting as its new colour scheme pinks and blues to represent its balance between being light and fun, but still very serious when it comes to business,” she says. “We chose to adopt our old acronym as the company’s new name, as most people

NSDV specialises in the mining, environmental and construction industries. – Nupen

www.samining.co.za

The complacency of mere compliance Of the many risks that mining executives must navigate, community engagement and social license-to-operate challenges are now amongst the most prominent. The days of imagining that those challenges can be overcome through compliance with legislation alone are over. Greater profitability demands that communities be treated like the stakeholders they are, as this has been proven to allow operations to function with unhindered efficacy. NSDV’s Community Engagement Solution offers a unique, innovative and – above all – successful approach to this pressing issue. Our highly experienced team has been working in local communities for over four decades resolving the innumerable challenges corporate entities face when engaging in social upliftment discussions. These resolutions can be implemented on your behalf, too, to improve both your bottom line and the lives of others. With us, doing good really does make good business sense. Reach out today for a thoroughly comprehensive overview of the myriad on-the-ground realities you may currently be unaware of, and the implementable steps we guarantee won’t simply alleviate their impact, but turn them to your advantage. We’re just a truly transformative consultation away at NSDV.com

Nupen Staude de Vries

FINANCE & LEGAL COVER STORY

“ © ISTOCK – Funtay

NEW SOLUTIONS NSDV has created two new solutions: one designed to significantly assist junior miners and the other aimed at community engagement.

The rebranding exercise is to position the business as an integrated professional services entity, as opposed to merely a law firm. – Nupen

“

We have done this to highlight that our firm specialises in several unique areas that ultimately work hand in hand – namely the mining, environmental, and construction industries,” she says. “Our integrated, oriented and practical offering within the mining sector has really taken off, particularly with many of the junior miners that generally don’t have the resources to employ their own legal teams, so they contract us in as needed. “We operate on the principle that mining has a multitude of stakeholders, and success depends on having good relationships with all of them. This includes the communities affected by the mining – we see part of our role as being to clearly understand their needs and engage with them.” To this end, she says, NSDV has created two new solutions, one designed to significantly assist junior miners and the other aimed at community engagement. The first of these, a Mineral Rights Management offering, focuses on helping juniors and established players manage their rights compliance. “Essentially, we undertake a complete review of their mining rights and environmental authorisations – something of a mini due diligence – and take responsibility for managing and ensuring the compliance of these rights, such as lodging renewals timeously, or alerting the client to the fact that the numerous mining and environmental regulatory report are due. “For us, it is all about ensuring they remain compliant with what we consider to be their most valuable asset, since you don’t really have a mine without a mining right and their ancillary authorisations. “We also ensure compliance, and with this solution, we are able to foresee potential problems early – such as another entity applying for the same right or launching some form of legal challenge – and can thus

SA MINING

JANUARY / FEBRUARY 2022

address these rapidly through a timeous response.” NSDV’s key aim, she continues, is to get its clients into a position where they can begin mining quickly and can operate without interruption. Because NSDV looks after the various applications and licences through this solution, all the customer has to do, essentially, is dig the ore out of the ground.

FINGER ON THE PULSE

“I think one of the main reasons our offering is so attractive to mines is that both mining and environmental law changes regularly, and because keeping up to date with legislation is not their core business, they struggle to stay up to date. “On the other hand, we are a law firm and thus have our finger on the pulse with regard to such amendments. Furthermore, we have good, close relationships with the relevant departments, so are perfectly positioned to alert clients to changes even before they happen, given we are aware of the drafts in process.” The other offering being developed by NSDV is its Community Engagement Solution. “With recent case law like the Xolobeni judgment, along with changes in mining legislation, we have noted that communities are finally being recognised and taken more seriously within the process. Look at the recent Shell interdict for example.” Until recently, she adds, communities tended to be left outside the tent and thus lacked a voice in the process. Dealing with these communities was, in fact, usually viewed as a mere “tick a box” approach for mining organisations. “Our solution is instead designed to bring these communities into the conversation from the outset. We view this as more than just a compliance issue – these communities are clearly also stakeholders, so we believe

www.samining.co.za

they should be treated the same way the mining company would treat unions, employees, or shareholders. “This is the other core reason for our rebranding – we want to be viewed as a knowledgeable business that is able to educate clients in a way that helps them to make things easier, faster and more sustainable. “We are aware that lawyers are seen as trusted advisers, and we certainly provide such a service to clients. However, because we are essentially a professional services organisation, we can also provide trusted advice in relation to anything that falls within the construction or environmental arena as well,” she says. ■

FINANCE & LEGAL

PLATREEF SECURES $300M IN STREAM FINANCING TSX-listed Ivanhoe Mines’ South African subsidiary, Ivanplats, has concluded stream-financing agreements with Orion Mine Finance and Nomad Royalty Company for a $200-million gold-streaming facility and a $100m palladium- and platinum-streaming facility for its Platreef palladium-rhodium-platinum-nickel-copper-gold project in Limpopo, South Africa. The proceeds will be used to advance the first phase of Platreef’s mine development, with commercial production expected in 2024. The definitive feasibility study for Platreef’s phased development plan, which will provide updated production forecasts for the initial mine and subsequent expansion, is nearing completion with release expected in Q1 2022, the company says. Ivanplats has also signed documents relating to offtake arrangements for 100% of Platreef’s Phase 1 platinum-groupmetals (PGMs) concentrate production, which is expected to be more than 40 000tpa containing six payable metals, including palladium, rhodium, platinum, nickel, copper and gold.

HOGAN LOVELLS ANNOUNCES NEW LEADERSHIP FOR AFRICA PRACTICE

AFRIMAT ACQUIRES GLENOVER PHOSPHATE Open-pit miner Afrimat recently announced the acquisition of Glenover Phosphate for R550-million, consisting of R250m for the assets and an option to purchase 100% of Glenover’s shares for R300m. Glenover is located near Thabazimbi in the Limpopo province. Afrimat’s CEO Andries van Heerden says, “Current reserves of phosphate, vermiculite and rare earth elements provide for a resource life of more than 20 years. Afrimat will obtain the inventory deposits of historically mined resources and extend the life of project by acquiring the remaining in situ resource.” Van Heerden says this acquisition will further expand the group’s offerings in line with its diversification strategy. “The application of these minerals is vast. Phosphates are used in fertilisers and rare earth elements are used in many applications, one of which is for magnets in electric motors. “The international trend towards electric vehicles is expected to be a big demand driver for this application in future. Vermiculite is used in the construction of fire retardant partitioning boards, and in horticulture as a growth medium, as well as in animal feed and other industrial applications.”

SA MINING

JANUARY / FEBRUARY 2022

www.samining.co.za

Global law firm Hogan Lovells has appointed Olivier Fille-Lambie (Paris) and Arun Velusami (London) to head up its Africa practice. Both co-chairs are members of Hogan Lovells’ Infrastructure, Olivier Fille-Lambie. Energy, Resources and Projects (IERP) practice area, and of the internal Africa leadership team. Fille-Lambie and Velusami have extensive experience and networks on the continent and are committed to continuing to grow the global Africa practice, the company says. Velusami has advised developers, lenders and governments across Africa on major infrastructure projects, with particular expertise in the power sector, where he has advised on thermal, solar, wind, biomass and hydro power projects for almost 20 years. Fille-Lambie’s practice focuses on acquisition, project and structured finance, and on Organization for the Harmonization of Business Law in Africa (OHADA), currently applicable in 17 Arun Velusami. African countries.

STATE DIAMOND TRADER

Drives the beneﬁciation agenda By Nelendhre Moodley

n September 2021, the State Diamond Trader (SDT) took up residence at OR Tambo International Airport’s Special Economic Zone (SEZ). The new offices offer an expanded topclass work space to facilitate internal and external collaborations. They also represent the entity’s continued ironclad commitment to serving its clients and helping them foster business growth, CEO Mandla Mnguni tells SA Mining in an exclusive interview. The SEZ is said to be a home for many more diamond businesses in the near future. “The new location is close to key transport nodes, providing quick access for diamond producers travelling from the Northern Cape, North West and Limpopo provinces as well as international clients. “Importantly, for the high-value commodity, the new location with its top-notch security offers clients peace of mind of operating in a secure environment,” says Mnguni.

ADVANCING SKILLS AND TECHNOLOGY

2022 is a busy year for the SDT, which is looking to roll out a number of key initiatives, such as establishing a diamond and precious metals hub together with other stakeholders (a one-stop shop for diamond industry players) and an incubator to help new entrepreneurs succeed.

SA MINING

JANUARY / FEBRUARY 2022

“To establish the hub, which is now in its concept phase, we need funding. This funding will cover the cost of high-end tools, industry-leading technology, equipping the facility with cutting-edge security systems, furniture and training tools for the new entrants.

Funding

Minimum required to establish a diamond hub “The incubator programme will allow us to train new entrants in key elements of the diamond business including the requisite skills and business knowledge. With the latest diamond-cutting and -polishing technology being extremely expensive and not easily accessible to previously disadvantaged people, the latest technology housed at the hub will allow the new entrants access to the latest products.” The diamond-cutting and -polishing business is a highly competitive one, and while South Africa produces large quantities of small stones, the local

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industry remains on the back foot when compared to the highly skilled and low-cost Indian diamond manufacturing sector. To ensure that South African diamond beneficiators are able to compete on an even keel, the SDT is investigating acquiring the latest technology as well as partnering with the Council for Scientific and Industrial Research and Mintek to advance research and development for reproducing high-end technology, machinery and tools locally. “Currently, diamond-related technology and tools are designed and manufactured in Israel. If we are able to design the technology and reproduce the equipment and tools locally, we will succeed in expanding the diamond value chain,” says Mnguni. Given its strategy of upskilling new entrants to the sector, the SDT is working on resuscitating its three-year Enterprise Development Programme and will discuss with tertiary institutions to offer a recognised academic certificate on the completion of the course. The programme provides new market entrants with the necessary business acumen to advance their own businesses. “Currently, our in-house programme, though credible to the industry, does not carry a recognised academic certificate

DIAMONDS

“ The incubator programme will allow us to train new entrants in elements of the diamond business. – Mnguni

“

THE SDT MANDATE

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The mandate of the State Diamond Trader is to buy and sell rough diamonds and to promote equitable access to and beneficiation of the country’s diamond resources. The entity strives to address distortions created by the country’s historical exclusion of certain population groups from economic participation. It aims to grow South Africa’s diamond-cutting and -polishing industry by enabling and increasing participation of historically disadvantaged South Africans in the diamond beneficiation industry. The SDT is empowered by law to purchase up to 10% of the run-ofmine production from all diamond producers in South Africa. It sells to registered customers through an application and approval process.

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EXPANDING THE REGIONAL FOOTPRINT

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Having learnt numerous lessons since its inception in 2007, the state-owned entity is reviewing its business plan and outlining its 10- to 15-year strategy, which includes a rebranding exercise, and which will replicate the successes of Brand South Africa and Proudly South African. A successful rebranding exercise will go a long way in helping the sector expand its local footprint and increase collaborations across the diamond value chain, says Mnguni. “We need to establish our brand and start marketing it – this will be a good way to promote SA diamonds.” Aside from relaunching its inaugural diamond trading show, which was put on the backburner last year owing to the pandemic, the SDT is aiming to strengthen stakeholders. “We are also looking to strengthen the partnerships that we have with other stakeholders, such as jewellery businesses,

but the level of training is relevant for the market. And while initial talks have taken place, it is important to understand that tertiary institutions have to evaluate how the programme will fit into their curriculum.”

and supply them with an extensive array of diamonds,” says Mnguni. As such, the entity is looking to secure more rough diamonds for the cutting and polishing market. While local diamond producers are required by law to offer the SDT 10% of run-of-mine diamonds, in reality the SDT has access to between just 2-3% of diamonds. However, given the SDT’s intention of growing the local entrepreneurship base,

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Mandla Mnguni.

it is looking to secure at least 10% of local diamond production. This will ensure that existing clients and new market entrants have a wider variety of diamonds to choose from – this is certainly great news for an industry that is on the upswing. ■

SA MINING

JANUARY / FEBRUARY 2022

DIAMONDS

A primary crusher at a processing plant at Venetia Mine, South Africa.

DIAMOND BENEFICIATION De Beers drives agenda By Nelendhre Moodley

he diamond industry is experiencing a revival with an increased appetite coming from consumers for natural diamond jewellery. SA Mining recently caught up with executive vice president of diamond trading at De Beers Group, Paul Rowley, to chat about the measures in place to grow the diamond beneficiation pipeline.

WHAT IS DE BEERS’S STRATEGY REGARDING DIAMOND BENEFICIATION FOR AFRICA?

Our focus at De Beers Group is on finding the best ways to carry out our business so that it supports our producer country partners with their broader socioeconomic objectives. In each of the producer countries – Botswana, Namibia and South Africa – there is a desire from governments to access as much of the value-adding processes beyond mining in the diamond supply chain in-country as possible to support government developmental objectives. We have a direct selling relationship with businesses that undertake cutting and polishing of diamonds (our sightholders), so we are able to create incentives for them to set up factories in diamond-producing countries through our supply mechanisms. With the supply of diamonds being finite,

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we can create these incentives by setting aside a certain share of production so that it is only sold to those businesses with factories in-country for the purposes of supporting local beneficiation. By supplying the larger goods with higher average price through this supply channel, we look to establish an economically sustainable approach, despite the competition from lower labour cost centres. Beyond this focus on supporting the establishment of diamond cutting and polishing in-country, we also support beneficiation (downstream value addition) more broadly through a range of other activities in-country. These include diamond sorting and valuation, rough diamond sales, jewellery design (through our Shining Light Awards), and diamond retail (with the establishment of De Beers Forevermark points of sale). We continue to engage with government partners to understand their continuing socioeconomic objectives and to work out the best ways that we can support these goals in a commercially sustainable manner. It’s also noteworthy that embedded within our commercial strategy is our Building Forever sustainability framework. This has four pillars (Leading Ethical Practices, Partnering For Thriving Communities, Protecting The Natural World, and Accelerating

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Equal Opportunity). Each of these is a key consideration in all our commercial activities, and is focused on meeting the needs of our producer country partners.

HOW HAS COVID-19 IMPACTED ON THIS STRATEGY?

The pandemic has not changed our beneficiation strategy – rather it has had a much wider impact on the industry as a whole. For a period in 2020 there was effectively a complete standstill across the supply chain, and this meant that operations around the world in all parts of the pipeline were negatively impacted, and the cutting and polishing operations in producer countries were no exception. However, as the situation around the globe has evolved in relation to the pandemic, there has been an overall improvement in all areas. While there continue to be challenges related to the pandemic, and as there are waves of infections that can lead to specific impacts in different geographies, overall the strong recovery in consumer demand for diamonds coupled with the world’s improved ability to cope with the issues presented by the pandemic have led to things returning to a much improved situation.

“

An employee places a diamond in a weighing machine at De Beers Group Industry Services, Surat.

A conveyer belt at a processing plant at Venetia Mine, South Africa.

Jewellery on display at De Beers Jewellers, Old Bond Street, London.

We have seen a range of new technologies rolled out in diamond manufacturing operations. – Rowley

“

GIVEN THE PUBLIC’S INCREASING APPETITE FOR LAB-GROWN DIAMONDS, IS THERE STILL INTEREST FROM SMMES TO GET INTO CUTTING AND POLISHING OF MINED DIAMONDS?

Lab-grown diamond (LGD) demand remains relatively small compared with demand for natural – seemingly growing quickly, but from a very small base. Moreover, we have seen a rapid decline in prices for LGDs, and the likelihood is this is expected to continue further – placing pressure on margins for LGDs throughout the pipeline. And there are also several challenges for those in the midstream working with LGDs. There is lots of competition, a lack of comfort from retailers in purchasing goods due to declining prices (they much prefer to have them on consignment), variability of product and questions over the sustainability of the business. Overall, reports indicate that some of the businesses in the midstream that moved into LGDs are looking to move back out again. Cutting and polishing is a business that can be risky and long-term visibility of supply is a significant consideration. So with a sector such as LGD that has already seen so much change and which continues to be so uncertain in terms of its future, there are certainly legitimate

questions that businesses will generally want to think about before entering it. Meanwhile, natural diamonds have a long track record of enduring value, with an established market with more predictable dynamics. And of course with natural diamonds playing such a positive role in generating positive impacts for the people and places where they are discovered, such as Botswana, South Africa and Namibia, they have a story that reflects consumer interests. Overall it should be recognised that the cutting and polishing sector, whether for natural diamonds or LGDs, is a challenging one for smaller businesses in particular for a number of reasons. This includes the requirement for expertise that can take many years to develop, the capital intensiveness of the work and associated challenges with working capital, the need for effective downstream networks, among others. But those businesses that believed LGD cutting and polishing to be an easier sector to enter seem to be finding that many challenges remain.

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THE DEMAND FOR MINED DIAMONDS IS EXPERIENCING A REVIVAL AFTER BEING IN THE DOLDRUMS FOR SOME TIME. WHAT ARE THE FACTORS DRIVING DEMAND?

Consumer demand for natural diamond jewellery had in fact been growing for many years before the pandemic, but the recent revival has indeed seen the pace of growth accelerate impressively. There are several factors behind this – in particular the fact that natural diamonds have something important to say in our lives. They represent our finest emotions at a time when there is a strong desire to buy meaningful gifts and demonstrate an emotional connection with loved ones. They connect us directly to our planet’s history at a time when there is a revived focus on the importance of having a connection with nature. And they are a joyful purchase when there is a straightforward desire for things that just make us feel happy at a time when happiness has been in > shorter supply than usual.

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DIAMONDS

WHAT IS DE BEERS’S FOCUS REGARDING BENEFICIATION FOR 2022 AND 2023, SPECIFICALLY WITH HELPING SMMES GROW THEIR BUSINESSES?

Our focus remains using our role as a leading supplier within the sector to incentivise increased economic activity in-country by our customers. Due to the challenges outlined above, the businesses that undertake most of the beneficiation in diamond-producing countries tend to be the larger, more established companies (that already have the skills, capital, networks etc. to support sustained success). But our supply policies incentivise them to undertake skills training and knowledge transfer to support the development of local capability. We also run a range of enterprise development initiatives, including one called the Enterprise Development Programme (EDP), specifically focused on young beneficiators. We have initially piloted this in South Africa and now intend to expand into Botswana and Namibia in order to support opportunities for up and coming entrepreneurs in producer countries. In South Africa we will expand the EDP to include jewellery designers, more specifically our De Beers Group designer alumni (Shining Light Awards). The inclusion of jewellery designers to the EDP ensures that we expand beneficiation activities across the diamond pipeline to complement the diamond cutters and polishers and jewellery manufacturers already taking part in the programme. South Africa is also piloting Tirisano Mmogo, which is a beneficiation collaborative initiative that integrates the various facets of the beneficiation activities

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A rough diamond is cut and polished and reviewed by a KGK employee with a loupe in Botswana.

De Beers engages with government partners to work out how best to support their socioeconomic objectives. – Rowley

“

Meanwhile, the reduced competition from categories such as luxury travel or the experience economy have enabled natural diamonds to capture a greater share of wallet. All of these factors have supported the continuing positive demand trends we have seen for natural diamonds recently.

to create a unique product proposition in the form of locally made jewellery. The different elements of the supply chain involved with Tirisano Mmogo include diamond cutters and polishers (Molefi Letsiki Diamonds and Thoko’s Diamonds), jewellery manufacturers (Isabella Jewellers), jewellery designers (De Beers Shining Light Awards alumni – Hunadi Tlomatsana, Lilja Hastie, Malefa Phoofolo and Madeli Viljoen) and clothing designers (Abigail Betz). The initiative affords the participants to build on the synergies of the various stakeholders thereby creating an interconnected supply chain.

WHAT ROLE DOES DE BEERS PLAY IN THE PLUCZENIK AND NUNGU DIAMONDS PARTNERSHIP, IF ANY? We do not have any direct role in the partnership, but the business has applied to De Beers for a supply contract which is currently under consideration. However Nungu Diamonds was a participant in our EDP for up and coming entrepreneurs, and it is great to see this partnership evolving. We are excited to see the potential for learnings and look forward to seeing benefits of the programme come to fruition.

The Forevermark Ring.

ANY NEW DEVELOPMENTS IN THE TECHNOLOGY/INNOVATION SPACE?

One exciting new initiative we are working on is called the De Beers Code of Origin. This is a trusted diamond programme focused on helping consumers recognise when they are buying a diamond discovered by De Beers – one which is supported by our Best Practice Principles and our Building Forever sustainability framework. With this programme – currently in the learn to scale phase – we are able to connect consumers directly with information on the positive impacts their diamond has had on the people and places where it was discovered. With the rapidly accelerating consumer interest in products and brands that align with their values when it comes to issues of sustainability, we believe that this will offer a compelling proposition, in light of the immense positive impacts our diamonds deliver in places like Southern Africa. New technologies are a constant in diamond mining, but even more so in diamond beneficiation, where people are constantly looking at how to improve productivity and quality. In Southern Africa we have seen a range of new technologies rolled out in diamond manufacturing operations as these operations keep track with the latest technology on the global market. These new technologies require significant capital investment and signify the confidence that our clients have in the future of beneficiation in Southern Africa.

WHAT ELSE WOULD YOU LIKE TO SHARE WITH OUR READERS? We encourage everyone to learn more about the hugely positive impact our diamonds deliver for the people and places where they are found. We have recently launched 12 ambitious sustainability goals for 2030. ■

SA MINING

JANUARY / FEBRUARY 2022

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DIAMONDS

DIAMOND TRADING Belgium and Africa By Nelendhre Moodley

ntwerp, Belgium, remains the global centre for the diamond trade. SA Mining recently caught up with Belgium’s ambassador Didier Vanderhasselt to chat about the diamond trading relationship between Belgium and Africa.

As you know, 86% of all rough diamonds and 50% of all polished diamonds are traded in Antwerp, Belgium. In terms of production, 80% of all rough diamonds are produced in only five countries: the Russian Federation, Botswana, Canada, the Democratic Republic of the Congo (DRC) and Australia. If we take a closer look at exports to Belgium, we see that Africa contributes a significant portion of direct imports in rough diamonds. In 2020, direct imports from Africa amounted to nearly 18 million carats, or roughly 29% of all imports into Belgium. Some African countries, like Lesotho, market their entire production via Antwerp. The other big producing countries exporting rough diamonds to Belgium are the Russian Federation, Australia and Canada.

SA MINING

Diamonds remain an unmistakably important pillar of Belgium’s economy. They still have a significant impact on Belgium’s trade balance, with diamonds representing 5% of all Belgian exports and 15% of all Belgian exports outside the European Union. With 6 600 direct and 26 000 indirect jobs created, the diamond industry also continues to be an important employer.

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JANUARY / FEBRUARY 2022

Belgium continues to be the market leader in the diamond trade. – Vanderhasselt

“

WITH DIAMONDS BEING A KEY INDUSTRY FOR BELGIUM, HOW IMPORTANT IS THE RELATIONSHIP WITH AFRICAN DIAMOND PRODUCERS?

HOW IMPORTANT IS THE DIAMOND INDUSTRY TO BELGIUM’S ECONOMY AND HOW MUCH DOES IT CONTRIBUTE TO BELGIUM’S GDP?

As for all industries, 2020 was an unpredictable and difficult year that brought most of the diamond industry to a standstill. However, by summer last year, it was clear that the industry was quick to rebound. By Q4 of 2020, it appeared that in comparison

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to the rest of the luxury segment, diamonds and diamond jewellery were performing extremely well.

GDP CONTRIBUTION DECLINED FROM 8% A FEW YEARS AGO. WHAT IS IT CURRENTLY AND IS BELGIUM LOOKING TO GROW ITS DIAMOND BUSINESS?

Rather than looking at the GDP contribution, we believe it is key to look at Belgium’s leading position in the global diamond trade – for more than 575 years now – and to the importance of diamonds in our trade balance. Belgium continues to be the market leader in diamond trade, and with good reason. Antwerp is still home to a small but highly skilled group of diamond cutters who specialise in the processing of the most remarkable diamonds that come on the market. But Antwerp is first and foremost a business centre, backed by the most sophisticated commercial infrastructure and expertise. By providing this stable environment, where sustainability and transparency are key elements, Antwerp continues to attract traders from all over the world. We want to continue to show the world why Belgium is still the place to be for

Diamonds are an important pillar of Belgium’s economy.

“

Didier Vanderhasselt.

Eighty-six percent of all rough diamonds and 50% of all polished diamonds are traded in Antwerp, Belgium. – Vanderhasselt

“

South Africa exported 2.2mct to Antwerp in 2020.

trading diamonds. We do so by supporting the industry at large in promoting digitalisation, by reinforcing the Kimberley Process and by transforming the sector into a sustainable business model that works for every player in the value chain. Diamonds play an important role in our bilateral relations and Belgium is constantly seeking to intensify its ties with producer countries, both politically and economically. We are in constant dialogue with these countries in order to create a sustainable and transparent industry. This is why we contribute fully to the work of the Kimberley Process Certification Scheme, as we have done from the very beginning.

WHAT QUANTITIES OF DIAMOND EXPORTS COME FROM THE VARIOUS AFRICAN PRODUCERS?

In 2020, all African countries combined exported almost 18 million carats to Belgium. In that same year, South Africa exported almost 2.2 million carats to Antwerp. That represents 28% of the volume of produced carats in South Africa. A remarkable improvement compared to 2019, where South Africa exported only 17% of its rough diamonds to Antwerp.

With a production value of $958-million, South Africa launched itself into the top five producing countries in the world, together with two other African countries, Angola and Botswana.

ARE YOU ABLE TO COMMENT ON THE QUALITY OF THE DIAMONDS FROM AFRICA?

In diamonds, there is no one-size-fits-all answer. It is one of the most difficult minerals to mine, in terms of finding a deposit and estimating quality and viability of a mining project. The quality of African diamonds has a large range, depending on the geography of the mine, the technology available and the expertise in the company that sources the diamonds. For example in the DRC most diamonds are alluvial and largely produced by artisanal and small-scale miners, compared to Botswana or Lesotho, where we see industrially mined diamonds of high to very high quality in terms of size, clarity and colour. In recent years, some mining companies have invested heavily in applying new technologies, such as scanning. This is why we see more and more exceptionally large stones being unearthed. Last year

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for instance, Petra Diamonds found an exceptionally rare blue diamond in the South African Cullinan mine, which was sold in Antwerp, fetching what probably was the highest price per carat ever paid for a rough diamond. The Letšeng mine in Lesotho is also famous for the size and quality of the diamonds it produces and has the highest average selling price in the world.

ASIDE FROM THE NUNGU DIAMONDS AND PLUCZENIK FAMILY COLLABORATION, WHAT OTHER COLLABORATIONS EXIST BETWEEN THE TWO COUNTRIES?

There are plenty of links between Belgium and South Africa in the field of diamonds. Just to name a few, one of South Africa’s most respected tender houses, First Element, has its tendering operations in Antwerp, a collaboration that has been very fruitful in past years. Petra Diamonds, the South African miner that operates the Cullinan mine, was able to conduct sales from its Antwerp office in the past two years, generating consistent revenue. Considering many polishing units have closed down in South Africa, the opening of a new factory by the Pluczenik family is a major symbol of >

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JANUARY / FEBRUARY 2022

DIAMONDS the Belgian diamond sector’s commitment towards South Africa. And it is impossible not to mention De Beers, which is well established in South Africa, where it has been operating for over 130 years, and obviously participates in the whole diamond ecosystem.

HOW DO SUCH COLLABORATIONS BENEFIT THE AFRICAN DIAMOND INDUSTRY?

A partnership such as the one between Nungu Diamonds and the Pluczenik family has many positive repercussions. First of all, it is an investment in the South African economy, and it will generate job opportunities and contribute to skills development. It will also bring new technology and all this combined will add local value for the South African diamond sector. Enabling and empowering producing countries, specifically in Africa, has always been a priority for Belgium. Our sectoral federation has a very active policy on building capacity and knowledge transfer to African diamond producing countries, and offers training in myriad domains, such as valuation, grading, polishing, compliance, etc. Together with the sector, we also created a forum to exchange with African producing

The diamond industry was quick to rebound last year.

18mct in 2020

Direct imports of rough diamonds from Africa into Belgium countries on the opportunities and challenges faced by the diamond industry: the African Diamond Conference. We had a very successful physical version in Brussels in 2017 and an online version in 2020, as the conference that was set to take place in Durban had to be postponed due to COVID. We are hoping to be able to organise another edition in the near future.

ARE THERE ANY LATEST DEVELOPMENTS IN THE DIAMOND SPACE THAT YOU WOULD LIKE TO SHARE WITH OUR READERS?

The arrival of synthetic diamonds is clearly a challenge for the natural diamond industry. Consumers are indeed increasingly interested in how their products are sourced and are worried about social and environmental impact. In different formats, with the different players, we aim to exchange on how to better address the threat of lab-grown diamonds and how to continue to make sure that natural diamonds do good for the communities and for the planet. Transparency and good practices are key elements to ensure a sustainable and socially responsible industry. ■

SA MIN NG

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ENERGY

MBAMBA KILENDA

A copper producer within a year of approval? By Nelendhre Moodley

ew kid on the block Central Copper Resources Plc (CCR) is perched on the sweet spot as it progresses its flagship Mbamba Kilenda copper project, aiming to be a producer within a year of project approval, COO Kevin van Wouw tells SA Mining. With a widening supply-demand gap in the copper space currently playing out, the soon-to-be copper producer is set to reap some handsome rewards in the near future. “Due to the regulatory uncertainty of the timing of the issue of the mining exploitation licence, CCR has withdrawn its intention to

MBAMBA KILENDA The Mbamba Kilenda project located 70km south of Kinshasa in the DRC sits on the west copper belt which extends over 1 400km from Angola, the DRC, Congo Republic to Gabon.

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list on London’s AIM market,” says Van Wouw. London-based CCR is instead busy advancing its portfolio of exploration and development projects in Zambia and the Democratic Republic of the Congo (DRC), with the Mbamba Kilenda project being its most advanced project. “We will complete the definitive feasibility study of phase 1 of the project in the first half of 2022, and then subject to issue of the already approved licence, can proceed with implementation.”

PROGRESSING MBAMBA KILENDA

The copper exploitation and development company is in the process of finalising the feasibility study for the Mbamba Kilenda project and has engaged various parties for the supply of key equipment and services. The copper developer completed its pre-feasibility work in 2020, and with a completed definitive feasibility study can resolve the finances for project development. “This step is of major importance for CCR as it allows the company to commence its project in a phased way, building financial capacity and skills as we transition from explorer/developer into an operator,” says Van Wouw. He says as a result of the high-grade nature of the Mbamba Kilenda resource, a direct shippable ore-type concentrate will be generated, running at around 20% Cu, making the project extremely cash flowpositive from the implementation of the first phase. “This will not only assist with completion of the feasibility study of the subsequent

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phases, but will also aid in paying for the implementation of the major expansion of the project.” According to the pre-feasibility study, a total capital commitment of $230-million has been identified for the first module. Of that amount, $46.7m has been earmarked to progress the first phase of the project. “At current copper prices, no further capital will be required. Once we have completed the feasibility study, we will seek to finalise the reduced finance requirement as a mixture of equity/off balance sheet debt and normal debt as appropriate for a company of our size.” Mbamba Kilenda is a shallow, high-grade resource with significant expansion potential to both the east and west and containing an “ultra” high-grade zone. The high-grade zone has a copper grade greater than 18% Cu and has been identified as a direct shipping ore product. The mine, which has a 12-year life of mine in the current resource, will be a 30 000tpa copper producer. An induced polarisation geophysical investigation conducted in late 2021 has shown significant resource expansion potential within an additional 5km of strike length to the current resource. “As we expand this resource, we will increase the life of mine and add additional production modules.” Added to this, the various new targets within the same 85km belt along strike within the licence package covering the geophysical feature hosting the mineralisation will allow it to develop new

WHY COPPER AND WHY NOW?

Mbamba Kilenda project.

“

Mbamba Kilenda is a shallow, high-grade resource with significant expansion potential. – Van Wouw projects in a pipeline development regional (belt) scale potential. “When we stopped drilling in 2017, in order to secure the balance of the licence packages, we stopped in mineralisation to the east and west of the resource. We are currently running orientation geophysics both east and west of the resource to help identify the mineralised extensions. These will be followed up with further drilling. “With mineralised evidence along the entire 85km strike length, we are confident that this low-risk approach will more than double our current resource, adding both life and project scalability and new development projects over time.”

CCR’S EXPLORATION PORTFOLIO

The company’s Zambian project is the Lunga Basin project situated adjacent to the operating Chifumpa Mine, which is bestowed with grades of over 4% copper. In 2020, significant anomalism was identified on the property, which will be tested at depth by

reverse circulation drilling and then diamond drilling. Also located in the DRC is CCR’s 78% owned Titan Kayeye Project – touted as having world-class copper discovery potential. “The Titan Kayeye Project lies next to the world’s second largest new copper discovery by grade and tonnage – Ivanhoe’s flagship copper project, Kamoa-Kakula,” says Van Wouw, who is hopeful that the Kayeye Project will be just as attractive as the Kamoa-Kakula project. In a bid to unlock further upside, the company is advancing a drilling programme at Titan’s Kayeye Project. “Our teams have already proved geological continuity and the presence of mineralisation, with follow-up drilling at identified drill-ready targets. “In the next two to three years we plan to be developing another two to three projects on a similar scale to that of the Mbamba Kilenda project. At Lunga we expect to be completed with our resource development

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The supply-demand deficit that is developing and driving copper prices higher is being affected by two main situations. These are the continued demand for electrification across the world, and the commitment to infrastructure development by governments globally, which has yet to be implemented. “Meeting the soaring demand for electrification is more important than carbon replacement commitments or green revolutions that constitute more of the hype around copper consumption. Together, these factors are driving demand for copper from current levels of 20mtpa to beyond 30mtpa. On the supply side, very little investment has been made in copper exploration over the past 20 years and coupled with the fact that existing copper operations are aging and becoming ever lower in grade (0.58% average) makes for an attractive demand/supply situation for developers of copper projects. As such, we expect to see supply taper as mines reach end of life and new projects are yet to come online or be confirmed to replace the loss of capacity. CCR has been developing new copper over the past eight years, with $27-million invested in its projects to date,” says Van Wouw.

work on the shallow high-grade oxides and moving to a production decision. “Any success at Titan will fundamentally change our company. Further to this, we will continue to identify opportunities that suit our business model – by then we hope to have added another few licences to our portfolio.” ■

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JANUARY / FEBRUARY 2022

ENERGY

ENERGY CRISIS Impact on the economy and what to expect in 2022 By Bonginkosi Sithole: MD of Rand Heavy Industries, a clean energy solutions provider in Africa

Bonginkosi Sithole.

ower outages have pitched millions of South Africa’s homes into darkness, and disrupted the economic growth recovery from the residue left by COVID-19. In the last quarter of 2021, load shedding became intensified with stage 2 (Figure 1) guaranteeing a minimum of two hours of no power and for some, four hours, per day. Multiply that by six days and it makes it unviable to run basic business operations. No sector seems to escape the adverse impact of persistent power cuts. Manufacturing, which is one of the largest contributors to the country’s GDP, is burdened with production halts, losing time and efficiencies. Production factories are compelled to invest in commercial generators; however the frequency of the outages means more litres of fuel to sustain the generator threaten the fuel cost efficiencies of operating the generators. Small, medium and micro enterprises (SMMEs) declined by 11% in 2020 due to COVID-19 (SEDA – SMME Quarterly Update). Once considered the beacon of hope of unemployment alleviation, SMMEs are forced to sit this one out during the power outages due to lack of affordability for alternative energy – generators or back-up batteries. Even the telecommunications industry, which is a vital force in business operations, has been hammered. Cellphone towers run on electricity, paired with back-up batteries. Prolonged power cuts mean insufficient network coverage; fibre provision is also compromised. The result is limited or no internet. Modern business has been wired to rely on network connectivity. Outages disrupt communication, making it counterproductive for employees whose employers have opted for the “working from home” model. The average worker does not have access to solar power or inverter batteries; consequently a four-hour or more power outage results in compromised output.

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JANUARY / FEBRUARY 2022

Another utility affected is water, which requires electricity to pump water from reservoirs into towers. In food and leisure, some fast-food and sit-down restaurants must shut their doors during load shedding due to a lack of back-up energy to fire up their cooking platforms. Not only do they lose customers who may never return, but raw material (non-cooked food) can spoil. In mining, operations are interrupted in order to preserve power and for the safety of miners. In a country already weighed down by a high unemployment rate of 34.4% (QLFS 2nd Quarter 2021), load shedding further resulted in job losses of around 350 000 in 2021. GDP growth reduced by 3.0 percentage points (South Africa Economic Outlook 2021 – PwC). This affects investor confidence. The South African Reserve Bank has kept its growth predictions modest for 2022 and 2023, at 1.7% and 1.8% respectively, according to Investec’s monetary policy update.

R229.1-billion

Mining’s contribution to government revenue Economically the mining sector’s performance resulted in a 38% growth year on year (June 2020 to June 2021), providing a healthy contribution of 7.6% to South Africa’s GDP in the financial year 2021. It created and sustained approximately 2 300 000 direct and indirect jobs on average and contributed around R229.1-billion to total government revenue, says SA Mine 2021 – PwC. The impact of mining on the economy is paradoxical in nature. Although we see a positive economic contribution, mining remains an accomplice to negative

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environmental impact. Mining operations result in high CO2 emissions, high electricity and water usage, and contribute to pollution. Coal remains a contentious commodity. There is an immediate pressure from the globe for SA, which ranks as the 12th biggest source of greenhouse gas emissions. Certainly, it has a responsibility to reduce the use of fossil fuels, but this move must be strategic. Coal is one of the key mining commodities. It is a major source of energy in the production of electrical power, it’s versatile, with positive performance and contributions to the economy in the production of steel and a key source of energy in aluminium and cement production. Socioeconomically, 335 000 people in SA’s coal mining communities are dependent on coal for income, says PwC’s SA Mine 2021. Mineral Resources and Energy Minister Gwede Mantashe has called on African nations to form a united front to resist this global pressure to rapidly abandon fossil fuels, arguing that Africa is the least polluting

STAGE

2021

YEAR

2020

2019

2018

2015 0

200

400

600 800 1000 HOURS OF LOAD SHEDDING

1200

1400

Mining’s contribution to government in South Africa 350 300 250 200 150 100 50 0

Coal

Gold

Iron Ore

Coal

Gold

FY2020 ■ Mining sales, (Rbn)

Iron Ore

FY2021

■ Total impact on GDP (Rbn)

■ Total impact on jobs (number)

Source: PwC Strategy & Analysis from Social Accounting Matrix for South Africa

Load shedding hours. (18 November 2021 – EskomSePush notifier app insights)

Coal gold and iron ore’s contribution to SA economy.

Capacity reductions as Eskom’s coal-fired units reach the end of their life (or turbine dead stop dates)

Installed Capacity (GW)

Source: Draft IRP 2018 CSIR

1995

Load shedding resulted in job losses of around 350 000 in 2021.

continent in the world. Mantashe further says the intra-African trade of fossil fuels should be prioritised, and that countries should work to establish an African finance arm to raise capital for investments in oil and gas on the continent. Realistically, the decommissioning will not happen at the pace that’s expected. Eskom expects decommissioning of approximately 24.1GW of coal-fired power plants in the period beyond 2030 to 2050, according to Auctusmetals.com. Eskom indicates that despite decommissioning of old power plants and preference for renewables and gas, coal remains dominant in the energy mix for the planning period up to 2030. Renewable energy in business is gaining momentum. Government’s approval for companies to generate up to 100MW for own needs is welcomed by all, especially the mining sectors, as demonstrated by Anglo American Platinum awarding the Pele Green Energy and EDF Renewables as their supplier

2005

2010 2015 2020

2025

2030 2035

2040

2045

2050

Capacity reduction of Eskom coal-fired units.

of choice to build a 100MW solar photovoltaic (PV) plant in Limpopo. Retail giant Shoprite announced its plans to power 25% of its operations with renewable energy with the addition of 22 new PV sites to double its solar capacity. South African Breweries will now produce Castle Lite using renewable electricity, reducing electricity from the grid and decreasing interruptions to production. Property developers are now planning to incorporate renewable products in their building and construction plans as buildings generate nearly 40% of annual global CO2 emissions. The energy transition is a larger mission, and mining will play an imperative role in this transition. There is a surge of alternative energy technologies – inverters, lithium batteries, wind turbines, electric vehicles and their battery chargers; even solar panels are being upgraded for faster storage from the sun. These technologies will bring a complete

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2000

evolution of the mining mix to incorporate the sourcing of raw materials required for the structural development of renewable energy products. Lithium, cobalt, zinc, chromium, aluminium, copper, iron, concrete, steel, plastic, glass, iron, chromium, copper, aluminium, manganese and nickel are among the list of demanded minerals for solar, wind and types of battery storages. The demand for these products will not only impact the mining sector, but also open doors for new professions in the renewable energy space, even bringing about change on the academic curriculum front, reigniting interest in minerals and chemistry. It is also an open gate for infrastructure and skills development, which may just ease unemployment through new industries. Investors and local financial institutions must help create capabilities committed to expanding renewable energy financing and aiding customers, regulators and all other stakeholders in efforts to transform the country’s energy mix. ■

SA MINING

JANUARY / FEBRUARY 2022

AFRICAN OIL AND GAS

NOT DEAD YET

ENERGY

By Ogi Williams: director of strategy

SA MINING

JANUARY / FEBRUARY 2022

“ Price fluctuations in the crude space have gradually begun to push investors to alternatives, including gas. – Williams

“

ver the past two years the global oil and gas market has seen significant fluctuations in the price per barrel of crude. At the onset of the COVID-19 pandemic, the futures cost of West Texas Intermediate fell in the negatives as demand dried up globally amid lockdown restrictions. Subsequent months saw a gradual uptick as economic activity began to return, but with much speculation on when this would come back to pre-COVID levels. The gradual rollout of vaccines across the world in late 2020 and early 2021 was able to provide some confidence to global markets, but not without concerns of a resurgence in infections amid breakthrough cases as well as the evolution of the virus and how this would impact demand going forward. Since mid-2021 the cost of crude has been gradually climbing, hitting record highs in October 2021 for the first time since 2014 to reach above $80 per barrel, something not seen in years as global markets were flooded with supply. Demand has grown to such an extent to warrant intervention from US President Joe Biden in pleading with OPEC+ members to increase supply, which even if they wanted to, cannot, given their own existing capacity limitations, but something they have also turned down regardless in keeping prices higher. Output stagnation is set to last until April 2022, according to the group. The effects on natural gas prices were

and consulting at In On Africa

more limited over 2020, but have started to gradually see the same trends as oil. Price fluctuations in the crude space have gradually begun to push investors to alternatives, including gas, which too has now seen a significant surge in cost over the course of 2021. Similar to oil, natural gas prices have increased to highs not seen since 2014. The prospects of gas as an alternative option will probably see power generators in particular start to make longer-term moves to switch to the cleaner fuel in weaning off oil, while also capitalising on current prices ahead of further surges in demand as household consumption is set to rise over the 2021/2022 winter months in Europe and the US.

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HOW AFRICA STANDS TO CAPITALISE

All things considered, the gradual bounceback of global economic activity and the subsequent rise in prices for both oil and gas will bode well for African producers that have had to place projects on hold or cancel them entirely over 2020 as investment dried up amid global uncertainty. With the trend in demand gradually reversing, key projects have restarted across the continent, with a number of positive developments on the go. The largest motion made was the conclusion of the final investment decision on the East African Crude Oil Pipeline stretching from the Lake Albert basin in Uganda through to the Tanzanian port of Tanga in April 2021, which will see the

Fuel costs are an important consideration in mining.

The cost of crude hit record highs of above $80 per barrel.

$4.8-billion

Value of the Grand Tortue Ahmeyim LNG project latter secure a viable route for export of its crude reserves to Asian markets. In tandem, Uganda is also set to develop its first refinery as a way to increase value, with both components being developed in partnership with French energy giant TotalEnergies. On the west coast Angola and Gabon have both moved to ease up on regulatory red tape in driving additional investor interest. They’ve sought to open up additional offshore fields for development as well as look for further avenues to drive value-addition, including increased refinery capacity, setting up innovation centres, and looking to focus on other downstream product development. Though nascent by comparison with other markets, offshore projects in Senegal, including the Sangomar Field Development driven by BP and Kosmos Energy, will probably see final investment decision by 2022 and production begin by 2023. On the gas front the $20-billion Mozambican liquefied natural gas project spearheaded by TotalEnergies is the largest continental prospect, but has stalled as of April 2021 due to militant activity. Despite the current situation and military involvement from a number of Southern

African states, African Development Bank President Akinwumi Adesina is confident that development can get back on track by the end of 2022. The $4.8-billion Grand Tortue Ahmeyim field offshore Mauritania and Senegal is another major venture that will see additional development in 2022. South Africa is the latest to get on board in exploiting its own gas potential following the significant discoveries by TotalEnergies in 2019 and 2021 at the Brulpadda and Luiperd offshore fields, respectively. Though progress is slow in the continent’s second largest economy, given environmental concerns, the potential is sizeable and could bode well for South Africa, which is currently knee-deep in a power supply crisis. This amid deteriorating infrastructure and international pressure to begin moving away from coal as part of its energy agenda.

THE LONG-TERM POTENTIAL IS THERE, BUT SWIFT ACTION IS NEEDED

Without decisive motions across the board in all markets and the fast-tracking of regulatory bottlenecks, African hydrocarbon potential will be lost as the world begins to

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adjust towards cleaner and greener fuels. Though analysts speculate that high prices of oil and gas seen in the early 2010s are a thing of the past, the impact of COVID-19 on global demand has a number of complexities that will keep the price buoyant for at least another five years. This transition period is a key time for African states to act quickly and decisively in positioning to capture on the price increases that are set to drive further investment in the sector despite international motions towards the opposite in the long term. Moving up the value chain is also key in eking out additional revenue considering that prices may come down abruptly as they have in the past 24 months. The most important consideration is one of moving quickly in decision making, lest the opportunity of the rebound in prices be missed as it was during the 2000s when China was investing in African oil and gas to meet its own energy needs. Limited supply by OPEC+ to counterbalance US influence and production output – in both oil and gas – is something to keep an eye on going forward, while the shift towards gas in China is another area to monitor along the way. ■

SA MINING

JANUARY / FEBRUARY 2022

ENERGY

LOAD SHEDDING SA electricity production - TWh

25 22 19

Source: StatsSA

oad shedding is here to stay – for the next few years, at least – and its impact on business will continue to be devastating. SA Mining recently caught up with Afriforesight’s deputy chief economist and head of energy commodities, Vinesh Chetty, to chat about the cost of load shedding to the mining industry.

NO END IN SIGHT 16 13

Load shedding has forced some of South Africa’s energy-intensive heavy industries to curb operations or delay potential expansions, with multiple SA chrome and manganese smelters having reduced output or closed in recent years. While high prices can make it uneconomical to smelt in South Africa, lack of electricity security makes investing in smelting operations even less likely. Underground mining can also be particularly hard hit during the more severe stages of load shedding, when mines can be asked not to send staff underground. While the full effect of load shedding on the industry is difficult to quantify, one measure would be the lower output at smelters. Smelting activity has been in decline for the past three years as load shedding became more frequent and tariffs increased. In the 12 months ended July 2021, South Africa smelted only 2.9mnt of chrome, just over 50% of its 5.6mntpa capacity.

SA MINING

JANUARY / FEBRUARY 2022

Sep 21

Jul 19

Aug 20

Jun 18

Apr 16

May 17

Feb 14

Mar 15

Jan 13

Dec 11

Oct 09

■ ESKOM

Nov 10

Sep 08

Jul 06

Aug 07

Jun 05

Apr 03

May 04

Feb 01

Mar 02

Jan 00

HOW ARE THE CONTINUED ENERGY CONSTRAINTS AND LOAD SHEDDING IMPACTING THE MINING SECTOR?

Vinesh Chetty.

■ OTHERS

THE PRICE OF ELECTRICITY CONTINUES TO RISE. HOW IS THIS IMPACTING BUSINESSES, ESPECIALLY MINERS AND THE MANUFACTURING SECTOR?

The sharp rises in electricity costs seen in recent years have become an increasingly concerning burden for businesses to bear. From 2007 to 2021, tariffs for mining customers increased by an average of 15% per year, well above inflation, resulting in electricity costing almost 700% more in 2021 than it did in 2007. As noted above, energy-intensive heavy industries are hit most directly and most companies are looking to limit costs from rising electricity tariffs. Where higher efficiency machinery is available, this is often used to replace older, more electricity-hungry equipment. Mine designs in South Africa may be more likely to use diesel than mines in other countries, due to relative stability compared to rapidly rising electricity prices.

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WHAT IS THE MINING INDUSTRY’S APPETITE AND RESPONSE TO BEING ALLOWED TO PRODUCE UP TO 100MW OF RENEWABLE ENERGY WITHOUT THE NEED FOR LICENCES?

There is already a large appetite for selfgenerating electricity at mines. The Minerals Council South Africa expects its members to invest R60-billion to develop up to 3.9GW of electricity capacity and storage. Due to government raising the self-generation limit to 100MW, Minerals Council members increased their planned generation construction by almost 150%. Ferrochrome smelters alone plan to add 750MW of capacity to assist their struggling operations.

WHAT MEASURES ARE MINERS AND RELATED BUSINESS PUTTING IN PLACE TO REDUCE THEIR FOOTPRINT?

There is a strong push by miners to reduce their carbon footprint. Companies are doing so both due to investor pressure and rising demand for “carbon-neutral” commodities, which are

R60-billion

Investment to develop up to 3.9GW of electricity capacity and storage.

South Africa’s smelting production

often sold at a premium to products without carbon certification. Reducing their carbon footprints would also allow miners to lower their expenses under South Africa’s carbon tax. The Minerals Council has estimated a 2023 carbon tax bill of R3.8bn to R4.6bn (about 1% of mining revenue) which would increase the mining sector’s tax bill by about 20%. Operations are generally more energyefficient than before, due to the use of better technologies and building designs. Anglo American plans to be carbon-neutral (on scope 1 and 2 emissions) by 2040 while halving its scope 3 emissions. Glencore intends to reduce emissions (on scope 1, 2 and 3) by 40% by 2035 and be carbon-neutral by 2050. While it no longer operates in South Africa, BHP also envisions being carbon-neutral by 2050.

THE CALL FOR CLEAN COAL TECHNOLOGIES CONTINUES TO GROW LOUDER. IS THE SECTOR LOCALLY AND GLOBALLY WORKING TO SPEEDILY DEVELOP SUCH TECHNOLOGIES?

May 21

Feb 21

Nov 20

Aug 20

■ FERROMANGANESE (right axis)

otherwise be released. The process could be used to produce hydrogen, an even cleaner fuel.

Globally most new coal-fired power stations are built to more efficient standards and more are being built with “scrubbers” to reduce sulphur dioxide emissions. While Eskom has been reducing its emissions over the past decade, it still produces about 40% of the country’s CO2. Eskom has mainly reduced ash emissions, but has lagged at reducing sulphur dioxide and nitrogen oxides. While South African power stations were meant to meet stricter emission standards from 2020, only one has fully complied, due to funding challenges. Australia and the UK are considering Allam-Fetvedt Cycle power stations. These are super-critical power stations designed to reduce emissions by burning coal or natural gas in oxygen (not normal air) and high pressures, capturing gases that would

www.samining.co.za

May 20

Nov 19

■ FERROCHROME (left axis)

Feb 20

0 Aug 19

0 May 19

Feb 19

100

Nov 18

200

Aug 18

May 18

300

Feb 18

Source: DMRE

kt 50

400

Nov 17

kt 500

ANY OTHER INFORMATION YOU WISH TO IMPART? While high electricity costs in South Africa are a constraint, load shedding seems to be the larger issue. When businesses are unsure of electricity supply, it makes operating extremely difficult. When high energy costs must be factored into operating plans, South Africa’s erratic electricity supply is almost impossible to work around. It is interesting to note that South Africa generated less electricity in 2021 than it did in 2017, even as private producers ramped up output. Electricity generation increased steadily until 2007, but has slowly trended downwards since. The decline comes from lower Eskom output, as private producers have ramped up generation over the same period. ■

SA MINING

JANUARY / FEBRUARY 2022

ENERGY

MULTI-STAKEHOLDER COLLABORATION AROUND BATTERIES Key to powering a brighter future By Benedikt Sobotka, CEO of Eurasian Resources Benedikt Sobotka.

Group and co-chair of the Global Battery Alliance

he digital revolution, low-carbon transition and future energy security have led to an exponential global demand for batteries to power mobile devices, electric vehicles and renewable energy systems. But meeting the growing battery demand in a sustainable and responsible way requires that stakeholders all along the battery’s lifecycle – from the extraction of raw materials to production, use and recycling – work together to drive transparency and accountability across the battery value chain. In 2016, the Paris Agreement identified that 100 million electric vehicles needed to be added to roads by 2030 to reduce carbon emissions and keep global warming below 1.5°C. More recently the International Energy Agency projected that electric vehicles (across all transport modes) would expand to almost 145 million by 2030 – an annual average growth rate of nearly 30%. Since the lithium-ion batteries that power electric vehicles depend on lithium, nickel

and cobalt as key components, the extractive industry is facing its biggest purchase order to date and, with it, the challenge of meeting the skyrocketing demand for battery metals in a sustainable manner. For cobalt, two thirds of the world’s known resources are found in the Democratic Republic of the Congo, leaving few viable alternative markets from which to obtain this metal. And although much of the cobalt in the country is formally mined, there is a significant segment of the industry that has been linked with informal and unregulated artisanal and small-scale mining, unsafe working conditions, environmental degradation and child labour, among other risks. In addition to its involvement in social and sustainable development initiatives that directly address these risks, Eurasian Resources Group (ERG) – which operates Metalkol RTR, the world’s second largest standalone cobalt producing entity – is working with other industry players to

145-million by 2030

Projected number of electric vehicles on the road

improve traceability and provide assurance that the cobalt contained in batteries is responsibly sourced and produced.

ENSURING THE RIGHT RE|SOURCE

Re|Source is a platform born from ERG’s collaboration with leading industry players, among them miners Glencore and China Molybdenum Co., as well as Umicore, who produces cathode materials used in electric vehicle batteries, and renowned electric vehicle pioneer Tesla. Its development is further supported by pilot partners across a growing number of industry associates, including Norilsk Nickel and Johnson Matthey, and organisations such as the Responsible Minerals Initiative and Cobalt Institute are providing guidance on implementing best practices across the solution. The Re|Source solution uses blockchain technology – the same technology that powers cryptocurrencies like Bitcoin – to verify adherence to sustainability standards and prove provenance. Similar to a secure ledger, Re|Source gives a view of the material’s journey along the supply chain, >

SA MINING

JANUARY / FEBRUARY 2022

www.samining.co.za

ENERGY

“ The Battery Passport aims to act as a form of quality seal. – Sobotka

CIRCULAR ECONOMY

In a world faced with the growing threat of climate change, sustainability remains a critical issue. For example, a GBA report indicates that demand for lithium-ion batteries is set to increase by up to 19 times between 2019 and 2030. The significance of the impact becomes apparent when one considers that by that point, up to 11 million tonnes of such batteries would already have reached their end of life. Lithium-ion battery recycling in the developed world is currently at less than 5%, and if left unchecked, could create a significant waste issue with adverse economic and environmental consequences. This shifts circularity into focus. Essentially, a circular economy involves

SA MINING

JANUARY / FEBRUARY 2022

“

providing assurance that the cobalt used in end products is in line with leading industrial sustainable mining and sourcing standards and frameworks. This collaboration not only links supply chain players to each other but can also feed into broader initiatives – like the Global Battery Alliance’s (GBA) Battery Passport – and due to its scalability, can be applied to other critical battery materials in the future.

composting biodegradable waste, and in those cases – such as with batteries – where the waste is non-biodegradable, it relies on reusing, re-manufacturing and finally recycling. While the battery’s role in supporting the transition to renewable energy and the decarbonisation of transportation is clear, it can only be recognised as a sustainable solution if its entire lifecycle – from mining through to disposal – is rooted in sustainable practices. Therefore industry players, governments and NGOs must work together to support this circular economy and find ways to improve and prove a battery’s comprehensive footprint.

PASSPORT TO SUSTAINABILITY

As a founding member of the GBA – a publicprivate collaboration platform – ERG is working alongside members such as Audi, LG

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Chem, BASF, the World Resources Institute and United Nations Children’s Fund (UNICEF) on developing the Battery Passport. The Battery Passport aims to act as a form of quality seal, plotting the battery’s impact and performance along a host of environmental, social and governance and lifecycle markers that are benchmarked against accepted standards of what a sustainable and responsible battery is. Essentially, it is a digital representation of its bearer and tells the full story of its journey along the value chain to assure that batteries are sourced, produced, and recycled responsibly and sustainably. It is this assurance, which can only be achieved through collective and transparent action from all stakeholders, that will secure batteries’ long-term potential to support future technological progress, carbon neutrality and the widespread application of battery storage. n

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MATERIALS HANDLING

MEMSA TARGETS INCREASED

VISIBILITY AND INDUSTRY INTERACTION

“

its reliance on funding from the Department of Science and Innovation through the Mandela Mining Precinct and the Department of Trade, Industry and Competition (dtic), MEMSA has been implementing a strategy to build out and communicate its value proposition, gain greater visibility and build win-win partnerships with private sector entities. This has seen the CEO engaging industry OEMs and service providers, and participating in numerous webinars, seminars, networking events and exhibitions. “Since I took over last year, I have been fostering relations with our members and meeting at least five local manufacturers each month to better understand the challenges they face and how we, as MEMSA, can assist them in improving and growing their businesses. “In fact, we have been pushing for the mining manufacturing industry to have a louder collective voice so that we are able to better tackle issues impacting industry. This includes the need for industry-appropriate financial instruments and incentives.” The sector has been hard hit by the

“

n a bid to help the mining industry’s original equipment manufacturers address some of the challenges they face and increase its membership base, Mining Equipment Manufacturers of South Africa (MEMSA) has been on a drive to dramatically increase its visibility, CEO Lehlohonolo Molloyi tells SA Mining. Established in 2016, MEMSA is an industry cluster organisation aimed at advocating for and promoting the interests of its members and the South African mining equipment industry more broadly. The cluster works closely with a range of partners to maintain and build the competitive advantages of the industry, which include cost-effective manufacturing, continuous innovation, and the ability to customise equipment to customer requirements. Membership is currently at 40 including major local original equipment manufacturers (OEMs) such as AARD Mining Equipment, Bell Equipment, Dezzi, Fermel, HPE, JAE and Rham, as well as a range of emerging, small and medium manufacturers. To grow its membership base and reduce

MEMSA can assist clients in improving and growing their businesses. – Molloyi

SA MINING

JANUARY / FEBRUARY 2022

www.samining.co.za

By Nelendhre Moodley

COVID-19 pandemic, irregular supply of electricity and weakened investor confidence. Meanwhile, in line with increasing its visibility, MEMSA recently held its inaugural golf day – an event sponsored by Standard Bank, Bell Equipment, Sanlam, Paramount Tracks and Spress and attended by 80 players, including MEMSA member companies. The golf day had guest speakers from the dtic (Tshepiso Kadiaka, deputy director of minerals beneficiation and mining equipment), Exxarro (Sandile Khumalo, manager of supply chain sustainability), and Standard Bank (Eran Singh, business banking, head: trade sales). Molloyi also secured a seat as a guest speaker at the recently held Manufacturing Indaba and Dubai Expo 2020. He was hopeful about growing MEMSA membership to beyond 50 by the end of 2021.

“ The commodities sector boom has not translated into investment in the mining manufacturing sector. – Molloyi

TAKING TARA TO THE NEXT LEVEL

“

The Technology Availability and Readiness Atlas (Mining TARA) platform, which was launched in 2020, recently received a facelift. Mining TARA provides an easy access point for local and global mining companies and engineering, procurement, construction and management companies to view mining technologies developed and manufactured in South Africa. It was developed in response to the realisation that the range of quality and innovative equipment manufactured in South Africa is not well known – even among some local buyers. Researchers in the South African Mining Extraction, Research, Development and Innovation (SAMERDI) programmes further need to understand what technologies are available locally.

The database structure and user interface were revamped to increase flexibility and make it more user-friendly. The upgrade was completed late last year, and the improved website is to be launched early in 2022. “We streamlined the search engine into different categories and sub-categories to help users to better navigate the programme. For instance, we divided the equipment into underground and surface-mining products, as well as functional groups such as mine development, stoping, mineral processing and support services, including IT, communications and logistics. “The objective is to ensure that users are able to reach the desired information as easily and as quickly as possible,” he explains. The new site is dynamic and will provide subscribers with updates on new equipment added to the market.

DRIVING RESEARCH, DEVELOPMENT AND INNOVATION

According to Molloyi, since the closure of the old Chamber of Mines Research Organisation, much of the investment into mining research, development and innovation had declined, with the knock-on effect being significant job losses. “As a result, the mining industry is relying mostly on innovative products developed by Scandinavian countries, which remain heavily invested in RDI for the development of cutting-edge innovations. And while the commodities sector has been booming and adding to government reserves and to gross domestic product, it has not translated into

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investment in the mining manufacturing sector. “Moreover, with the onset of the COVID-19 pandemic, fewer people have been onsite, which has led to an actual decline in the mining manufacturing segment,” says Molloyi. In fact, local manufacturers have had to pick up the slack and invest in their own RDI initiatives, targeting product development to improve health and safety by progressing, for instance, developments in autonomous articulated dump trucks. Efforts to reduce the carbon footprint have seen OEMs advancing developments in lithium ion battery projects, and subsequently, battery-powered vehicles. “A number of local manufacturers are progressing innovations aligned with automated vehicles, trackless machines and pushing the boundaries in developing collision avoidance systems. The aim is to ensure greater safety for equipment operators who often work near danger zones, particularly in underground mining operations. “A number of the products from the Isidingo Drill Challenge, initiated three years ago by the Mandela Mining Precinct and MEMSA, are currently being trialled with some products already at commercialisation stage,” he says. Further to this, local OEMs are collaborating with institutions of higher learning, including Wits University, on various initiatives, such as DigiMine, and the University of Pretoria on 3D and virtual reality simulations. n

SA MINING

JANUARY / FEBRUARY 2022

MATERIALS HANDLING

SGB-CAPE INTRODUCES QUIKDECK IN AFRICA

By Nelendhre Moodley

SA MINING

“

JANUARY / FEBRUARY 2022

“

s buildings go higher and mines get deeper, the demand for innovative access solutions continues to rise, with project houses servicing both the construction and the mining sectors seeking safe and efficient options to gain entry into difficult-to-reach spaces, says rope access manager Cobus Joubert of SGB-Cape Rope Access. A service provider of access scaffolding and industrial access-based maintenance equipment, SGB-Cape has introduced QuikDeck, an alternative to the traditional scaffold, to the market. The product is gaining traction with numerous industry heavyweights, including Eskom and Sasol. SGB-Cape Rope Access is a division of Waco Africa, which was established in 1948 and is the parent company to subsidiaries Form-Scaff, Sanitech, SkyJacks and Abacus Space Solutions. The SGB-Cape Rope Access division was launched in 2016. “As companies target zero harm, we can offer alternative solutions to scaffolding; not just because of the associated cost but also due to the extensive amounts of space it takes up and the large number of workers needed to truck in the products, off-load and carry them to site. “For these reasons, there is a growing preference for alternative access methods, including QuikDeck and rope access, which deliver minimum disruption as workers get in and out of the work space much quicker. Importantly, fewer people and equipment are onsite, thereby reducing the risk of injury or fatalities.” QuikDeck is a unique suspended access system that can be built while suspended in the air or on the ground and then hoisted into position. Aside from being easy and quick to assemble, the product can be dismantled just as speedily and relocated for use on another site. “QuikDeck was launched in the US a few years ago and we were fortunate to have partnered with US-based Safway which

QuikDeck is a unique suspended access system that can be built while suspended in the air. – Joubert brought the product to the African market. SGB-Cape first used QuikDeck during the construction of South Africa’s most recently developed coal-fired power plant, Kusile Power Station, in Mpumalanga. “We used it during the peak construction stage and had about 5 000m2 of the QuikDeck suspended across multiple areas and multiple boilers.” The product, which has successfully been used in the South African market for the past six years, supports higher loads with a load capacity of 366kg/m². SGB-Cape used a variety of different access methods and products during the construction of the Kusile Power Station, including rope access, QuikDeck, scaffolding, mobile platforms and aluminium pop-up scaffolds. Following the product’s success on the Kusile power project, SGB-Cape began

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marketing it to its extensive customer base. The company recently received an order from petrochemicals giant Sasol. “Apart from the interest being shown by construction contractors operating in Johannesburg for the QuikDeck, SGB-Cape is also looking to introduce the product to the oil and gas industry,” explains Joubert. SGB-Cape and its sister companies place huge importance on safety: “We adopt stringent safety protocols not only because it is our social obligation to do so, but also because it is good business practice as it creates economic benefit by increasing efficiency and environmentally sound business practices. “SGB-Cape adheres to zero harm to our people, clients, public workplace and environment. We are accredited members of multiple organisations, including the Institute of Work at Height, International

“ SGB-Cape used a variety of different access methods during the construction of the Kusile Power Station. – Joubert

“

SGB-CAPE OFFERING

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SGB-Cape offers five core services: access scaffolding, thermal insulation and cladding, rope access, industrial corrosion protection and asbestos abatement. Our specialist rope access services complement the group’s traditional scaffolding, mobile elevated work platforms and suspended platforms, offering an affordable alternative to access hard-to-reach locations quickly, efficiently and with minimal disruption. SGB-Cape operates in Africa (South Africa and other subSaharan African countries), Australasia (Australia and New Zealand) and the United Kingdom.

There is growing demand for innovative access solutions.

Rope Access Trade Association, International Organisation for Standardisation, Corrosion Institute of Southern Africa and The South African Quality Institute.”

GROWING THE AFRICAN FOOTPRINT

With the construction sector in the doldrums, suppliers to the industry have long been eyeing mining for growth opportunities. “The construction industry used to account for a big part of our turnover, but since its decline, we have shifted our focus to the mining industry both locally and in Africa. In fact, our biggest growth is currently from the mining sector. “As a solutions provider with an extensive range of access solutions, we believe that we offer massive benefits to the sector through cost savings and turnkey solutions. We are gearing to be at the forefront of the supplier list and the preferred supplier of access

solutions to the mining sector.” Among its achievements in mining, Joubert flags the role the company played in “assisting one of the big biggest platinum mines in Rustenburg install a new settler vertical shaft to a depth of 1 000m” below ground. “Using our range of access products, we assisted with lowering the steel sections in place and the rigging and safety systems throughout the project. By using rope access, we minimised the downtime that is often associated with the traditional scaffolding system. The project was delivered on time, within budget and with a 100% safety record. The mine was extremely pleased with the service.” SGB-Cape has an extensive footprint in Africa with an established presence in Angola, Ghana, Democratic Republic of the Congo, Namibia, Botswana and

www.samining.co.za

Mozambique, and also leverages off the footprint of its sister companies, namely Form-Scaff and Sanitech. With a number of mining projects taking off in Ghana and Mozambique, SGB-Cape is targeting these areas as its potential growth prospects. “We offer a whole range of solutions to customers, be it for projects on the ground, on sea and even for shafts going down to depths of more than 1 000m. SGB-Cape will be there to deliver solutions safely with the highest quality possible.” ■

SA MINING

JANUARY / FEBRUARY 2022

MATERIALS HANDLING

EQUIPMENT PRODUCERS Hope for improved fortunes in 2022 By Nelendhre Moodley

outh Africa’s highly specialised mining equipment suited to arduous conditions remains in high demand across the globe, including Africa. According to the CEO of the South African Capital Equipment Export Council (SACEEC), Eric Bruggeman, SA exports around R150-billion worth of specialised mining equipment for both underground and surface mining each year. But, he says, given the mountain of challenges being faced, including the pandemic and its knock-on effects and unrelenting load shedding, local equipment manufacturers are taking a huge hit to their businesses. The SACEEC, which has a membership of 165 members ranging from large equipment producers such as Bell Equipment to small business with a turnover of less than R10-million per year, says the pandemic is causing upheaval in the supply chain, wreaking havoc on the timelines of product import and export across the globe. “The supply chain challenges continue to have a massive impact on business. The lack of supply of steel and general shortages, for instance, are having a negative impact on the sector. “These factors coupled with the recent riots and unrest, strike action by the National

SA MINING

Brelko conveyor belts.

R150-billion

Value of specialised mining equipment that SA exports each year

JANUARY / FEBRUARY 2022

Union of Mineworkers and load shedding are all certainly not conducive to good business or sustainable production,” says Bruggeman. These factors are having a ripple effect across the entire manufacturing sector, especially the transport sector, which is having to deal with extended product lead times. “Our borders are also not functioning normally – including the road border posts, ports and harbours. Overall this is affecting the performance of the South African economy, as goods cannot be shipped in a

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cost-effective way, and more importantly in a timely manner. “In fact, the associated financial impact is massive and delivers a body blow of some several percentage points to our gross domestic product for this year.” Despite the wide-ranging impacts, especially the disruption to the travel and exhibitions industries, the sector has found new ways of communicating with its client base, i.e. through one of many social mediums such as Zoom and webinars. While these mediums of connecting get the job

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done, they are not as effective as business-tobusiness or face-to-face meetings. “Our industry is not an online catalogue buying business; it is a highly specialised equipment trading sector designed to deliver products to specification. In particular, this new way of communicating with clients has had a huge impact on new business with new clients, given that face-to-face meetings were discouraged. To this, new business has been drastically reduced.” But Bruggeman remains hopeful that in 2022 a semblance of normality will return with exhibitions and world travel once again on the cards, “as this remains the most effective way to gain new business for our members”.

Bruggeman says the South African mining industry is not in a good growth position, with a lack of new mines and expansion projects being developed currently. “There is insufficient investment into the South African mining sector and absolutely no growth of any large proportion currently under way,” says Bruggeman. He says there could be greater political will injected into increasing investment appetite and creating a strong level of confidence in the sector – “something which is greatly lacking in our country at the present time”. ■

The Federation for a Sustainable Environment (FSE)

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SACEEC supports local manufacturers of machine and equipment and capital equipment – including Brelko conveyor manufacturing, KAMA mine safety equipment, DFC valve manufacturing and R&E pumps, among others. The council implements various incentives for its members, including assisting them with exporting equipment and forming numerous partnerships with organisations around the world to help its members network with the international mining sector. SACEEC also assists its members with entry into new geographies and paves the way through appropriate introduction to the different buyers to ensure that the process is made easy, efficient and cost-effective.

Promoting the ecological sustainability of development and the wise use of natural resources in Southern Africa

Promotes the ecological sustainability of development and the wise use of natural resources in Southern Africa It protects and promotes environmental health and functional ecosystems for future generations The FSE promotes sustainable and just social development as an inseparable consequence of natural resource use development projects

environmental impacts that affect people and the environment; · Ensures that the total cost of the use of natural resources including all externalised and long-term costs of maintaining ecosystem services to local people, are provided for and borne by the project; · Facilitates the remedying of existing environmental degradation; and · Mobilises collaborative national and local action among like-minded entities and raises funds and legal and technical expertise to support such actions.

www.fse.org.za

The FSE · Ensures that developments involving the consumptive or destructive use of natural resources specifically benefit local residents and parties directly affected by the development; · Informs all decision making in development, including in planning and monitoring activities, that affect local people and natural and environmental resources; · Takes action, including legal action, to hold decision makers accountable in situations where development may have negative social, economic or

Postnet Suite #113, Pivate Bag X153 Bryanston, Gauteng, 2021, South Africa Phone: (+27) 11 465 6910 Mobile: (+27) 73 231 4893 Email: mariette@pea.org.za

SAFETY, HEALTH, ENVIRONMENT

ADVANCING THE GREEN AGENDA New legislation takes eﬀect By Nelendhre Moodley

SA MINING

JANUARY / FEBRUARY 2022

n 2016 South Africa penned its signature to the Paris Agreement, which committed to reducing its greenhouse gas emissions to well below 2°C and pursuing efforts to limit it to 1.5°C. More recently, the Minerals Council South Africa lent its weight to the Paris Climate Change Agreement ambition of net zero greenhouse gas emissions by 2050. But exactly how well placed is South Africa in meeting these targets? SA Mining recently caught up with the Federation for a Sustainable Environment’s (FSE) Mariette Liefferink to chat about some of the key environmental concerns currently facing the country and the measures in place to resolve them. According to Liefferink, while South Africa has many initiatives in play to move to a low carbon economy, it remains plagued by numerous issues, including its heavy reliance on coal as an energy source. South Africa currently sources more than 80% of its energy from fossil fuels; but according to the country’s Energy Master Plan, coal reliance is set to decline to around 43% of the energy mix by 2030. The country is also challenged as it attempts to meet its Sustainable Development Goals (SDGs) by 2030, in particular SDG6, which targets the availability and sustainable management of water and sanitation for all. According to the World Bank’s preliminary findings on South Africa’s infrastructure needs and ability to achieve the SDG6 goal, the water efficiency target of 175 litres per capita per day was unlikely to be reached by 2030 without radical behaviour change from all users. The total cost to achieve the water and sanitation access targets varied between R104-billion and R133bn per annum over 10 years for water services, including water resources to service the potable demand that is excluding financing costs. “Without either an increase in the

Abandoned and liquidated mines in the West Rand. (Mintails)

water tariff level, potentially impacting on affordability, or an increased allocation from the national fiscus, South Africa will be unable to reach the SDG6 goal and its targets by 2030,” says Liefferink. Moreover, many of the actions in the 2018 National Water and Sanitation Master Plan, which were scheduled for 2019, 2020 and 2021, have not been implemented. These actions included finding a lasting solution for the excessive sewage pollution of the Vaal River and the country’s dysfunctional waste water treatment works as well as resolving issues related to mining within strategic water source areas and critical groundwater recharge areas. There are also many abandoned or liquidated mines that are placing massive pressure on the environment and the state. “Furthermore, the failure by the National Nuclear Regulator to regulate and remediate radioactive mine residue areas and concerns related to the application for a new nuclear power station (Thyspunt) are also worrying since there is a conflict between the mandate of the Department of Mineral Resources and Energy, which promotes the use of nuclear power, and its mandate to regulate the industry,” says Liefferink.

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NEW LEGISLATION

But all is not lost – the good news is that government has formalised new pieces of legislation to combat these challenges. How effective they prove to be is yet to be seen. Among the latest legislative developments are the National Nuclear Regulator Bill 2021 and the Draft National Mine Closure Strategy, 2021. The National Nuclear Regulator Bill seeks to address the existing gaps in the current National Nuclear Regulator Act and strengthen the enforcement provisions of the inspectors and the occupational safety exposure risks for the air crews. But, says Liefferink, the bill in its current form fails to address the recommendations of the South African Human Rights Commission on impacts relating to Naturally Occurring Radioactive Material (NORM) and Technologically Enhanced Naturally Occurring Radioactive Material (TENORM), the legacy of uraniferous waste (600 000 tonnes of uranium stored in 270 tailings storage facilities) within the Witwatersrand gold fields and the impacts on 1.6 million people as well as the remediation of 380 radioactive mine residue areas. “It is common knowledge that the

“ The ASM policy proposes that artisanal and smallscale mining co-exist with large operations. – Liefferink

“

gold ores of the Witwatersrand contain appreciable concentrations of uranium. Mining has resulted in the dispersal of radioactive material into the environment via windblown dust, waterborne sediment and the sorption and precipitation of radioactivity from water into sediment bodies.” To satisfactorily address the challenges related to NORM and TENORM, Liefferink advises that the National Nuclear Regulator (NNR) establishes regulations for contaminated areas/sites not under regulation (such as the Wonderfonteinspruit Catchment Area); define the roles and responsibilities among the NNR and intervening organisations; and establish a common regulatory regime for safety of remediation actions through coordination with other departments. “Such projects must be funded and radioactive contaminated areas must be identified,” she adds. Aside from the National Nuclear Regulator Bill, government has also inked the Draft National Mine Closure Strategy, 2021, which aims to manage the closure of mines in demarcated areas in a sustainable manner so that mines can achieve self-sustaining ecosystems after closure.

“The National Mine Closure Strategy will focus not only on rehabilitation of land but also on socioeconomic sustainability and some form of economic diversification during the current mining operations. “The impact will be that the mining sector can align closure plans to achieve selfsustaining ecosystems after mine closure and ensure that mines do not impact negatively on adjacent mining operations. This will also help mines integrate their environmental management programme reports, social labour plans and corporate social investment objectives so as to reduce duplication of efforts and aggregate available funding for coordinated regional projects.” Other legislation that was recently promulgated is the Draft Policy on Artisanal and Small-Scale Mining (ASM), 2021, which looks to incorporate ASM into the mainstream economy. As it stands the Mineral and Petroleum Resources Development Act (MPRDA) does not cater for the artisanal mining industry. The ASM policy proposes that artisanal and small-scale mining co-exist with large operations through contributing agreements, equipment leasing, technical support and participation in the supply chain.

The policy also calls on government to strengthen the laws regarding criminalisation of illegal mining to deter illegal mining activities. Further to this, a trained detective unit is proposed to handle illegal miners. According to Liefferink, the policy places pressure on mining houses to recognise the role of artisanal and small-scale mining and to provide support. “The strengthening of laws and criminalisation of illegal mining and the establishment of a trained detective unit will assist mining companies to minimise the illegal activities of highly organised criminal syndicates which are characterised by violence, damage to mining infrastructure, vandalism and risks to the safety of mine workers.” With regard to South Africa’s dire water situation, government recently outlined the National Water Monitoring Plan, 2021. However, Liefferink is quick to point out that budget and human resource constraints and large data gaps pose high risks to decision making and planning. She cites inadequate data across a number of areas including rural water > quality; surface and groundwater quality;

www.samining.co.za

JANUARY / FEBRUARY 2022

SA MINING

“ There are concerns related to the application for a new nuclear power station (Thyspunt). – Liefferink

Abandoned and liquidated mines in the West Rand (Mintails).

SAFETY, HEALTH, ENVIRONMENT

data gaps on quantity and quality effluent discharged by municipalities; severe lack of wetland data; and insufficient estuarine monitoring data (only 23 of the 300 estuaries are being monitored by the Department of Water and Sanitation (DWS)), among others. In order to improve the management of data and information, the National Water and Sanitation Master Plan has recommended the review and development of comprehensive and appropriate management, monitoring and reporting structures of the DWS’s data portal. The positive news though is the revitalisation of the Green/Blue Drop Certification Programme, 2021, which requires that municipal wastewater treatment works and non-municipal wastewater treatment works register their wastewater treatment plants. Operators of wastewater treatment works are also required to provide proof of competence of the maintenance teams and make available a risk register and wastewater risk abatement plan. “This will go a long way to inform the broader public of water quality, promote consumer confidence and greater transparency in service delivery,” says Liefferink. Other recent legislation that is set to positively impact the environment includes: ■ Proposed regulations pertaining to

SA MINING

JANUARY / FEBRUARY 2022

■ ■ ■ ■

financial provision for the mitigation and rehabilitation of environmental damage caused by reconnaissance, prospecting exploration, mining or production operations, 2021. March 2020 Amendments to the MPRD Regulations for Implementation. The National Eutrophication Management Strategy for South Africa, 2021. The National Wetlands Management Framework, 2021. North West and other provinces’ Climate Change Strategies and Climate Change Bill.

MINERS AND THE GREEN AGENDA

The Minerals Council South Africa recently announced that it was developing a Net Zero 2050 Action Plan and pathway towards achieving the goal of net zero greenhouse gas emissions. The action plan will include an increasing share of investment in renewable energy sources (green hydrogen, solar, wind, battery storage), research, development and innovation into new technologies, among others. In line with these targets, Eskom, Exxaro and Seriti Resources recently signed a memorandum of understanding (MOU) spelling out their intention to pursue the development of renewable energy projects to lower their carbon footprint at their operations.

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The first phase of the envisaged project pipeline will see the construction of a number of solar photovoltaic facilities both on-mine and at Eskom sites. Under the MOU, Seriti expects to achieve a reduction in CO2 emissions of up to 350 000tpa, around half of its current emissions of 700 000 tonnes of CO2 equivalent through the consumption of coalfired electricity generation. Exxaro expects to achieve a reduction in CO2 emissions of up to 130 000tpa at its Matla coal mine, which represents a saving of 70% of the greenhouse gases with Matla at full production. Gold and platinum producer SibanyeStillwater is also driving efforts to reduce its emissions levels and its carbon footprint. The miner has committed to carbon neutrality by 2040. South African miner Gold Fields’ South Deep Mine is running a waste management campaign in partnership with FSE, the Gauteng Department of Agriculture and Rural Development and the Rand West Local Municipality. The programme looks to clean up host communities and teach community members the importance of a clean environment. South Deep is now a zero effluent discharge mine, meaning that no surface water is leaving South Deep Mine – it is a closed circuit. ■

9-12 May 2022 | Cape Town, South Africa

Reconnect with the mining industry in-person Mining Indaba will be back in Cape Town in 2022 Get ready to return to Cape Town as the industry unites to fuel transformations and collaborations. The must attend inperson event will bring together visionaries and innovators and connect you with your next business opportunity.

Limited sponsorship and exhibition places remain

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#MI2022

SAFETY, HEALTH, EQUIPMENT COVER STORY ENVIRONMENT

USING MINE CLOSURE

to combat climate change By Herman Gildenhuys, environmental consultant at Ukwazi Mining

SA MINING

JANUARY / FEBRUARY 2022

“

ith COP26 in full swing at the time of writing, moving away from fossil fuel towards renewables, and in particular “powering past coal”, has been high on the agenda. Before the conference, South Africa had already planned to reduce coal’s contribution to the energy mix to less than 60% by 2030. This commitment has been further solidified through one of the latest outcomes of the summit – SA, the globe’s 12th largest carbon dioxide emitter, is set to receive $8.5-billion from the governments of the United States, United Kingdom, France and Germany to help end its reliance on coal. All sounds great at conference, but is it achievable in practice without significant socioeconomic and political dislocation and what role (if any) should mine closure play? As it stands, approximately 80% of the country’s electricity comes from coal, and current demand exceeds supply. For some time now, Eskom has indicated plans to shut down 8GW to 12GW of generation capacity at its ageing coal-fired power plants over the next decade. Instead of investing in new coalfired projects, the state utility has hinted at repurposing its power plants for renewable energy. Given Eskom’s current capacity gap of 4 000MW to 6 000MW, additional electricitygenerating initiatives will have to be fast-tracked in order to keep up with South Africa’s developmental needs as well as its latest commitments. At the end of October 2021, the Department of Minerals and Energy (DME) announced the 25 winners of bid

South Africa plans to reduce coal’s contribution to the energy mix to less than 60% by 2030. – Gildenhuys window five for the procurement of 1 600MW from onshore wind and 1 000MW from PV solar projects. The race towards renewable energy generation is, however, not without its own environmental impacts. Renewable energy developments are land-hungry and often create conflict between bioenergy production, biodiversity protection and agricultural productivity. Mining activities have, over several decades, created vast tracts of land in need of rehabilitation. As such, the mining sector can contribute significantly to the transition to a greener, low-carbon economy by repurposing these areas for renewable power generation. Exxaro and Seriti, key suppliers of Eskom’s coal, have already signed an MOU with the provider that will see these companies implementing renewable energy initiatives at their respective operations.

www.samining.co.za

RENEWED THINKING

The draft National Mine Closure Strategy, published for comment in May 2021, acknowledges that past attempts to restore post-mining ecosystems to their original, pristine states have often not been possible, and introduces the concept of creating a fitfor-purpose condition post-closure. The aim is to create a self-sustaining ecosystem, or an alternative sustainable post-mining land use, which ensures the development of a post-closure economy. Stipulations specifically mention renewable energy generation as a potential end land use to consider after mine closure. Operational mines that generate their own power using renewable sources can form a generation base that could remain in place, post mine closure, and that could also be used for the long-term treatment and pumping of mine-impacted water, if required.

“ Using already disturbed mine sites for renewable energy generation takes the pressure off greenfield development sites. – Gildenhuys

“

Maximising the re-use of mining infrastructure by leaving it in place post-mining would lower both closure costs and the capital expenditure of future developments. Water supply, accommodation and labour should readily be available, thereby minimising construction time and cost, and mitigating the loss of employment and potentially mitigating the negative socioeconomic and political risks that are inevitable when mines close. In addition, using already disturbed mine sites for renewable energy generation would take further pressure off greenfield development sites elsewhere.

RENEWED PURPOSE

The Kidston Clean Energy Hub located in North Queensland, Australia, is a testament to the potential of renewable energy generation as an end land use. When Kidston gold mine closed in 2001, it led to large-scale job losses, negatively impacting livelihoods. Innovative thinking, however, turned the situation around with the installation of a

renewable energy hub, which has since created 900 jobs. A 50MW solar farm was built on top of a disused tailings dam, with expansion plans under way to increase the solar farm’s capacity to 320MW. When complete, the hub will also include a 250MW hydroelectric power station and a 150MW wind farm. The two large open pits on the property were filled with water after closure and will function as the reservoirs of the hydroelectric scheme. Reverse turbines and generators will be installed in an underground tunnel connecting the two pits, while water released from the upper reservoir to the lower reservoir will generate energy that can then be dispatched when electricity is in high demand. During the day, water will be pumped back to the upper reservoir using power generated by the solar farm, with grid power being used at night. This process is then repeated daily, with the facility acting as a giant battery during peak periods.

RENEWED SOLUTIONS

Eskom’s supply challenges, the recent rise in the threshold for self-generating facilities from 1MW to 100MW, and the rapidly declining costs of renewables have led many South African mines to consider the installation of renewable energy projects. In September 2021, the Minerals Council South Africa stated that its members were planning to invest in facilities that could generate capacity of up to about 2GW, with a value of between R30-billion and R40bn. Solar farms are also increasingly considered a feasible post-closure land use, while underground pumped hydroelectric energy storage systems show potential at some of South Africa’s very deep gold mines. Climate change and a low carbon economy pose both a threat and an opportunity to the mining industry. It is critical to integrate closure planning with mining studies and operations. What could be even more critical is integrating a different energy mix to the closure process. The implementation of sustainable renewable energy hubs on previously mined land could be an innovative gateway to a greener future. Renewables may yet provide mining communities with a transformation dividend without the need for Karpowerships. ■

There is a move away from fossil fuels towards renewables.

www.samining.co.za

SA MINING

JANUARY / FEBRUARY 2022

COLUMN EQUIPMENT

MININGSTORY WITH THE MAJOR COVER

CAN SOUTH AFRICAN MINING BE TURNED AROUND?

SA MINING

JANUARY / FEBRUARY 2022

www.samining.co.za

The views expressed are the author’s own and do not necessarily reflect SA Mining’s editorial policy.

on until the very end? Can they never be removed ost revolutionary movements and before it’s all too late? Yes. They can be. It is rare, their despotic leaders who take over but it certainly can happen. Africa has three a country generally hold onto control illustrative examples in the DRC, Zambia and until that country has become so Ghana. dysfunctional that there’s little left Back in the late 1990s, changes in the three (money, assets or power) to keep the movement countries’ ruling parties and in government and its dictators in power any longer. thinking and policies brought massive positive This is when the gang and its czars are finally changes in mining legislation. Nationalism and kicked out of office by a populist revolt of citizens punitive ownership and operating requirements who have had enough of the cancerous movement for those countries’ mines were reversed. Investordevouring the nation. friendly laws and policies were adopted and This scenario certainly seems to have been fairly rigorous foreign investor campaigns were the case in most of Africa’s 54 independent implemented. states. African countries too often seem to have Peter Major The results were astounding and coincided as the norm revolutionary governments and their Mergence Corporate with the advent of the greatest commodity boom debilitating leaders hanging on until there is almost Solutions Director: Mining the world has ever known. Ghana, Zambia and the nothing left to steal and ruin. DRC benefited enormously. Production, jobs and These parties and despots don’t just fade away, revenue jumped. and mining invariably seems to be the main target for the wretches. Tens of billions of dollars of foreign investments poured into the Logical, because mining is generally the backbone and nucleus of DRC and Zambia especially. DRC copper production rose from 30kt in these countries’ wealth and forex, so is used to enrich and keep the 2000 to an estimated 1.5mt for 2021. Zambia’s copper production rose miscreants in power. from 245kt in 2000 to an estimated 910kt in 2021. Ghana boomed too Thus, we invariably see and experience the proverbial “race with gold production now exceeding South Africa. against the clock” of complete pillage and destruction of a country’s DRC and Zambian cobalt production rose just as dramatically, heart and lungs – the mining industry – before the despots and their and there were huge increases in their gold and tin production “movement” are ejected from power. This “race against the clock” too. Ironically all of this came refers to the speed at which about even when there was an these social engineers work to DRC’s ‘Rise, Fall and Rise again’ copper industry DRC COPPER PRODUCTION 000’s TONNES unstable, inefficient (and corrupt) steal and destroy as much as Yearly 12/31/1941 – 12/31/2015 political environment in DRC and they can from the mining sector 1 000 1 000 750 750 Zambia. (and whole nation) before their 500 500 Yet because of their friendly removal from government. 400 400 mining investment legislation and Ghana’s gold production Regime change 200 200 150 150 policies, the billions of dollars that fell continually in the 1970s to 100 100 flowed into the three countries a low 10tpa in 1987 (140tpa 75 75 enabled many huge mines to be today). The Democratic Republic 50 50 40 40 built and over 100 000 real jobs of the Congo’s (DRC) copper Regime change 30 30 45 50 55 60 65 70 75 80 85 90 95 00 05 10 15 19 and hundreds, if not thousands, of production fell from 550ktpa in subsidiary industries to be created. the early 1970s to barely 35ktpa SA Gold mine industry and employment. Wiped out forever. Contrasting this exactly 180 in the late 1990s. And Zambia’s SA COM Gold mine employment degrees is poor South Africa, who high of 775ktpa of copper in Going back to zero. in the same time experienced 1969 was on a downward spiral 600 000 the opposite. Countless negative for 25 years, hitting 200ktpa in 500 000 mining ministers, policies and 2000 (910kt in 2021). 400 000 legislation were implemented from Most of Zimbabwe’s mineral 300 000 1999 through to 2021 and over production has undergone a 200 000 450 000 “real” mining jobs were steep descendent over the past 100 000 destroyed. Over 100 large mines 40 years from the Zimbabwe 0 and shafts were closed, vandalised African National Union-Patriotic 1900 10 20 30 40 50 60 70 80 90 2000 10 2020 and destroyed (most for good), Front’s rule. And poor South and foreign investment in SA’s Africa’s once-world-dominant mining industry has almost completely dried up. Forever? gold industry leadership continues to fall thanks to the African Zambia and other African countries have shown us the way. Almost National Congress’s (ANC) disastrous, racist, unconstitutional mineral no change in legislation and policy can replace the loss of 450 000 real industry policy and legislative diktat. jobs in South Africa’s once juggernaut gold industry. Nor the majority South Africa’s mining industry has suffered greatly under ANC of now closed mines and related industries – all gone forever. rule and their ever-increasing negative legislation and policies have But positive legislative and policy changes could stem further cuts strangled growth and investment in the sector. in SA’s mines and jobs. And who knows – just stopping the slide for a Yet hope springs eternal among those in mining. It has to. The few years could send a signal to the world’s investment community 12 August Zambian national election, which was followed by South that maybe growth could be possible once again, someday, if Africa’s own November municipal elections, are a case in point and government made the change and actually walked some “good” talk. saw a large “kicking out” out of the decades-in-power incumbents. Long shots yes. But we continue to hope and pray! ■ Why are revolutionary movements and despots allowed to hang

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MAKING MINES WORK

BOSCH PROVIDES EXPERT DIESEL SERVICE

Diesel technology is the driving force behind much of the mining industry worldwide – from the vehicles that transport mined minerals and components to the highpowered construction machinery onsite. Developer and manufacturer of diesel technology, Bosch, says its certified fuel injection experts are trained to world-class standards and to ensure that the cleaning, servicing, refurbishing and calibration of diesel injection components are done to the same high standards.

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THE COMPANY OFFERS THE FOLLOWING SERVICES:

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Repair and service Specialist cleaning, servicing, refurbishing, and replacing diesel injection components to the highest industry standards. All work is done inhouse, and using quality-approved parts.

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Calibration and testing Offers training, state-of-the-art diagnostics software, calibration equipment, and extensive experience with diesel fuel injection components ensuring that Bosch finds and resolves the client’s problems without delay. Sales and services Faulty or failing parts can cause high fuel consumption, low performance and

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permanent damage to a diesel engine. Bosch works to find the right part and service to meet the client’s needs. Warranty and guarantees Bosch stands by its repair work and backs it up with a standard six-month guarantee on workmanship and a 12-month national warranty on parts. All work is done in-house to the highest standards using quality parts.

TO ADVERTISE IN SA MIN NG www.samining.co.za

READ WHAT REALLY GOES DOWN IN SADC

CONTACT ADVERTISING Ilonka Moolman 011 280 3120 moolmani@samining.co.za

INDEX TO ADVERTISERS AECI Mining Explosives ................................................................. OBC Air Liquide Industries ......................................................................... 24 BLC Plant Company ........................................................................ IBC Bosch Diesel Service ....................................................................... IFC Brelko Conveyor Products................................................................... 8 Federation for a Sustainable Environment (FSE) .............................. 43 Gates SARL .......................................................................................... 7 Invincible Valves................................................................................. 13 JH Fletcher & Co ................................................................................ 35 Keller Netherlands NV .......................................................................... 3 Komatsu Mining ................................................................................... 9 KSB Pumps & Valves ......................................................................... 15 Menar Capital ....................................................................................... 5 NSDV .............................................................................................10-12 Shell Lubricant Coolant and AdBlue ................................................. 21 Vendel Equipment Sales .................................................................... 51 Wirtgen ............................................................................................... 37

Tshepo Monyamane 011 280 3110 tshepom@samining.co.za

AFRICA’S LEADING EARTHMOVING EQUIPMENT & PARTS DEALER www.blcplant.com

PLANT

+27 11 555 2000

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OVER 600 MACHINES IN STOCK

info@blcplant.com

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HYDRAULIC EXCAVATORS

DOZERS

CAT 320D,323D, 325C, 330D, 336D, 345B, 374D, 385C, 390D/F

CAT D6R, D6T, D7R, D8T, D8R, D9R/T, D10T, D11T

ARTICULATED TRUCKS

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BELL B40D, CAT 740B

CAT 140H, 140K, 14H, 16G, 120H, 14M, 16M

HYUNDAI MANIA

BRAND NEW HYUNDAI HL770-9S LOADERS

Service exchange units available. 6 MONTHS WARRANTY on refurbished components.

View all our available stock on our website www.blcplant.com

aeciworld.com

YOUR EXTREME BLASTING CONDITIONS. OUR EMULSION.

A signiﬁcant new development in AECI Mining Explosives’ product offering is the development of its Powergel X² range, designed for surface mining applications where extreme blasting conditions such as hot blast holes and reactive ground, or a combination of both, exist. *Only available in certain regions.

SA Mining January/February 2022

Articles inside

Central Copper Resources advances Mbamba Kilenda

SGB-Cape launches QuikDeck

MEMSA targets increased industry interaction

Green agenda – new legislation takes e ect

Vanderschuren – SAICE’s new president

SDT drives beneficiation agenda

De Beers grows beneficiation pipeline

First Quantum Minerals appoints Tristan Pascall as next CEO Kangra extends LOM beyond 2031