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SPECIAL FOCUS: MINING AUCTIONS

INSIGHT Price premiums boosting quality-focused Kumba Iron Ore Page 8

NEWS FOCUS UG2 outperforms as Sibanye positions for new world Page 6

FEATURES Mining Indaba Review Page 16

MEANS TO AN END

Auctions an efficient way to generate cash, reduce costs

Page 10

T o s u b s c r i b e S M S ‘ S U B S ’ t o 4 4 3 2 4

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www.miningweekly.comAlso publisher of Engineering News and Polity

ISSN

156

2-96

19Volume 25 no 7 March 1–7, 2019RSA – R14,50 (Incl.VAT) Combined Price for Engineering News and Mining Weekly

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LO MINING WEEKLY | March 1–7, 2019 3

Cover Story & Highlights

10 Auctions an efficient way to generate cash, reduce costs

12 Pan African half-year revenue up 52.8% to R1.3-billion

9 Glencore caps coal production at 150-million tons a year

Features16 Mining Indaba Review Energy solutions crucial to the future of mining

26 Mining Auctions Mines can save equipment costs through auctions

News & Insight6 UG2 outperforms as Sibanye positions for new

world

7 Glencore auditing 140 slimes dams

8 Price premiums boosting quality-focused Kumba Iron Ore

9 Brazil iron-ore tragedy brings home reality of mining risk – Kumba

13 State-owned AEMFC awarded PCF bid to the tune of R1bn

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29 WH Auctioneers

23 WorleyParsons

Editor: Martin Creamer Deputy Editor: Terence Creamer Editorial: Martin Zhuwakinyu (News), Mia Breytenbach (Deputy Editor Features) Zandile Mavuso (Senior Deputy Editor Features), What’s On: Asha Narain Projects in Progress: Sheila Barradas Enquiry Service & Subscriptions: Sharon Botha Online: Chanel de Bruyn (Senior Deputy Editor) Advertising: Reinette Classen

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PERSPECTIVES

4 MINING WEEKLY | March 1–7, 2019 LO

DIAMOND MINE WITH SPARKLING HISTORY: A mineworker walks towards a shaft at the Cullinan diamond mine, which continues to be a source of large gem diamonds and rare blue diamonds. Cullinan earned its place in history with the discovery of the Cullinan diamond in 1905, the largest rough diamond, at 3 106 ct, ever found, which was cut for use in the British crown jewels. Cullinan continues to produce world-class diamonds under the stewardship of the London-listed Petra Diamonds, which last week appointed Richard Duffy as its new CEO.

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EDITORIAL INSIGHT

LO MINING WEEKLY | March 1–7, 2019 5

“These are events that take place from time to time and . . . to offset these, you just need to become more resilient in the design of your own risk management infrastructure.”– DRDGold CEO Niël Pretorius, referring to the recent load-shedding implemented by South African State-owned power utility Eskom, which is facing an operational and financial crisis

“We want to say that, in South Africa, you can . . . mine and make your money, but give us the benefits of beneficiation. Play according to the rules, then we won’t trouble you – we will facilitate you.”– South African Mineral Resources Minister Gwede Mantashe, commenting on the lack of beneficiation that takes place in the local mining industry

SPEAKOUT

SHEILA BARRADAS | CREAMER MEDIA RESEARCH COORDINATOR & SENIOR DEPUTY EDITOR

LOWEST RUNG OF ESG HELL: Huge diversified mining company Vale must be put in the lowest rung of environmental, social and governance (ESG) hell for putting far more emphasis on dividend declarations decided behind fancy mahogany-doored boardrooms than on the safety of dicky upstream iron-ore tailings dams. Last month’s tailings dam disaster at Vale’s Córrego do Feijão iron-ore mine, in Brazil, killed 170 people and left at least 140 missing, this after Vale-BHP’s Samarco iron-ore tailings dam collapse killed 19 nearly four years ago. In response, Brazil has banned new upstream mining dams and ordered the decommissioning of existing upstream versions by August 15, 2021. This is both late and inefficient, and also needing to continue to hang its head in shame is BHP, the world’s largest mining company, which is only now urging its peers to create an independent international body to take charge of overseeing the construction, integrity and operations of tailings dams that store mined waste.

The volume in carats of a white diamond recovered from Aim-listed Firestone Diamonds’ Liqhobong mine, in Lesotho.

FACTS INFIGURES

SHEILA BARRADAS | CREAMER MEDIA RESEARCH COORDINATOR & SENIOR DEPUTY EDITOR

70

The amount in tonnes a year to which the use of tin could increase by 2030, owing to a surge in the demand for lithium-ion batteries for electric vehicles and energy storage, according to the International Tin Association.

60 000

Global mining world correct to take action on slimes dam negligence, establish strong auditing behaviourTHE GLOBAL MINING WORLD is correct to focus intensely on monitoring particularly the upstream varieties of mine tailings storage facilities (TSFs), which have taken so many lives and caused such environmental damage.

The Brazilian tragedies have been ghastly and every time one checks on the number of people who died after last month’s horrific TSF collapse at Vale’s Córrego do Feijão iron-ore mine, in Minas Gerais province, the number increases.

One would have imagined that a province with such a mining name would have been a world leader in doing things right. But the opposite has proved true and the province is getting world headlines for the wrong reasons.

The latest report on Vale’s Córrego do Feijão tragedy is that more than 300 people are likely to have perished, with many still unaccounted for. Diversified mining and marketing company Glencore was correct to spring into action in 2016, ahead of the first Brazilian Samarco tragedy that killed 19 at an iron-ore mine owned by Vale and BHP.

It now has ongoing auditing procedures on 140 slimes dams, 65 of them active and 75 of them closed. The concern is around 51% of the Glencore TSFs being of the upstream kind that requires ongoing attention.

“This is an issue for the mining industry and we support a TSF classification system and requirements for external review, with transparent disclosure to stakeholders and communities,” Glencore CEO Ivan Glasenberg told Mining Weekly last week.

Many industry discussions have been taking place under the auspices of the International Council on Mining and Metallurgy, with Samarco culprit BHP now also backing the concept of an inde-pendent international body being established to oversee the construc-tion, integrity and operations of tailings dams, which hold mining waste. “As an industry, we now have to redouble our efforts to make sure events like this simply cannot happen,” BHP CEO Andrew Mackenzie was quoted as saying.

Rio Tinto also disclosed information on its TSFs, revealing that its global standard is under review. Of the 100 TSFs on 32 sites, 21 are upstream construction facilities, which sounds the alarm bells.

Although Kumba Iron Ore, in South Africa, has an exemplary safety record, it was correct for CE Themba Mkhwanazi to also highlight this grave mining risk last week and commit his company to the highest standards of environmental protection.

Brazil’s mining regulator has belatedly banned new upstream TSFs and set a deadline of August 2021 for the removal of existing ones.

Vale has suspended activities at its Fabrica and Vargem Grande iron-ore mines after the crackdown. Engineering and environ-mental consultancies should come to the fore to ensure safe ways of storing mine waste and recommend valid inspections, geotech-nical excellence and faultless slope analysis, particularly against the background of upstream wall raises being reportedly “very popular” in Southern Africa.

An end must be brought to the death and destruction that TSFs have been causing across the globe.

The soaring prices of rhodium and palladium have put new focus on the upper group two

(UG2) reef, for long the poor cousin of Merensky reef in the hierarchy of platinum group metals (PGMs) mining.

Merensky's predominant platinum content has made it the preferred reef for decades, but UG2 is currently the new optimal because of its greater palladium and rhodium content, with chrome thrown in as a valuable coproduct.

This was driven home by Sibanye-Stillwater CEO Neal Froneman last week, when he extolled the value of its UG2 abundance to Sibanye – and also took steps towards entering the world of new-age metals with the acquisition of SFA Oxford, the UK consultancy that assesses strategic investment opportunities in future technologies.

Strategic Tolling DealThe company has also done a strategic tolling deal that enables it to get its hands on its own refined metals.

Since Sibanye began mining PGMs in 2016, the price of rhodium has risen by 300% and the price of palladium by 150%, which reflects on its timing astuteness in entering the PGMs fray and its foresight around the projected surging demand for palladium and rhodium.

At the time of going to press, rhodium was trading at $2 645/oz and palladium at $1 488/oz, and even iridium’s $1 460/oz was trading at a far better price than platinum’s current doldrums figure of $822/oz.

“Mining UG2 currently has significant benefits,” reiterated Froneman, who des-cribed rhodium as “almost the unsung hero of the changes in the PGMs markets”.

Sibanye’s UG2 reef at its Rustenburg mine gives it 10.53% exposure to rhodium; the Kroondal mine gives 9.9% exposure to rhodium “and, of course, the chrome credits are very, very significant and make a big difference to the business”.

Sibanye, with Lonmin, which it is in the process of acquiring, will run neck and neck with Impala Platinum in the number of rhodium ounces it will be producing.

Sibanye’s South African PGMs mix is 77% UG2 reef and 23% Merensky reef, and the strength of the rhodium and palladium prices has seen a surge in UG2 basket prices.

Sibanye, with the Lonmin transaction concluded, will become the biggest platinum producer in the world at a total cost of under R40-billion.

“The reason we’re able to do that is that we called the market exactly right,” said Froneman, with Sibanye's entry beginning in April 2016 with the acquisition of Aquarius for R4.3-billion.

That was followed by the acquisition of Rustenburg in November 2016 for R3.75-billion, Stillwater, in the US, for R25.6-billion in May 2017 and the pro posed all-share Lonmin transaction, which is estimated to be worth R4.1-billion.

Fast-Tracking PGMs TechnologyFor the longer term, Sibanye is positioning itself for participation in appropriate drivetrain and battery metals growth and setting out to understand the new-age metals and prepare for the new world.

“Things are changing rapidly. We want to be a mining company that’s going to be a new world mining company and we think that the new world is really going to be using high-tech minerals and metals,” said Froneman.

Because it does not have all the insights,

it has acquired PGMs consulting analyst firm SFA Oxford, which assesses strategic investment opportunities in future techno-logies. The UK consultancy is chaired by Stephen Forrest.

Froneman sees the acquisition as an enabler to fast-track PGMs market oppor-tunities and access PGMs-using intel lectual properties.

“Everybody associates electric power trains with batteries but they are also asso ciated with fuel cells and hybrids, and SFA Oxford has developed really good knowledge in terms of some of these future technologies,” he said.

Supply ChainThis follows Sibanye securing a toll agreement with Anglo American Platinum that gives it access to its metals, which opens the way for the company to involve itself in the down stream and supply chain as-pects of the PGMs market.

“This will be an 18-month to two-year process of developing the right knowledge to identify the right targets.

“Our immediate priority is really about getting our business firing on

all cylinders,” he said.Asked by Standard Bank analyst Adrian

Hammond whether the SFA Oxford acquisition was indicative of Sibanye wanting to become involved in metals like cobalt and lithium, Froneman says the company believes that new technology will be moving so fast that it is no longer obvious that those two “obvious” metals will be part of the future stream.

“But it’s those types of metals that are of interest to us . . . yes,” he added.

Sibanye Southern African PGMs opera-tions head Robert van Niekerk reported a successful operational turnaround, with Kroondal platinum mine achieving its best year ever. Production at the Mimosa mine, in Zimbabwe, remained consistent, Rustenburg’s production was lower and Platinum Mile, which treats tailings from Rustenburg, was negatively impacted on by improved Rustenburg recoveries.

He presented a graphic that showed how leveraged the company’s South African operations are to a higher PGMs basket price, with a steady 600 000 oz a year rising sixfold from 2016 to 2018.

NEWS&INSIGHT

PRECIOUS METALS

Good RunUG2 outperforms as Sibanye positions for new world

6 MINING WEEKLY | March 1–7, 2019 RA

NEAL FRONEMAN Mining UG2 currently has significant benefits

MARTIN CREAMER | CREAMER MEDIA EDITOR

To watch a video of Mining Weekly’s Mart in Creamer at Sibanye-Stillwater’s results presentation, scan the barcode with your phone’s QR reader, or go to Video Reports on www.miningweekly.com.

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RA MINING WEEKLY | March 1–7, 2019 7

Diversified mining and marketing com­pany Glencore is auditing 140 slimes dams, 65 of them active and 75 of

them closed.The company has been undertaking detailed

assessments and audits of all tail ings storage facilities (TSFs) over the past three years, after accumulating a signi ficant TSF asset footprint through mergers and acquisitions and organic growth.

Glencore CEO Ivan Glasenberg made these revelations at a media briefing last week against the background of last month’s tragic loss of 170 people at Vale’s Córrego do Feijão iron­ore mine, in Brazil, which has prompted renewed industry action to ensure that TSFs are not vulnerable to collapse.

“This is an issue for the mining industry and we support a TSF classification system and requirements for external review, with transparent disclosure to stakeholders and communities,” he told Mining Weekly.

Its own internal team reviewed all its tail ings dams in 2014, and a year later, following the death of 19 people in the Vale­BHP Samarco incident in Brazil, independent con sul tancy Klohn Crippen Berger (KCB), of Canada, was commissioned to review all its dams continually. KCB carries out regular sur­veillance and dam safety inspections on a quarterly to yearly basis for operating sites, yearly dam safety inspections for closed sites, and full corporate audits every 12 to 18 months. TSFs are assessed against national regu­la tions and guidelines and against criteria aligned with international guidelines from the Canadian Dam Association, the Australian National Commission of Large Dams and the International Commission of Large Dams.

Roles and responsibilities, change man age­ment processes, action tracking and docu­menta tion have been clearly defined, with all corrective measures being subject to verification.

“We’re relying on the technical experts and we have employed the best of the best, I under stand, in tailings dams, and we’re work ing closely with them to give us the best expert advice about how we secure the tail­ings dams. I understand the big problem is on upstream dams and we’re working closely with the experts to ensure that those are secure,” he said.

New upstream dams have been banned in Brazil and the decommissioning of existing

upstream versions has been ordered by August 15, 2021.

Glencore released a graph show ing that more than half of its TSFs are upstream dams.

Glasenberg said that many industry dis­cussions have been taking place under the auspices of the International Council on Mining and Metallurgy, which prompted quick industry action following the Córrego do Feijão slimes dam collapse.

Mining major BHP last week also backed the creation of an independent international body to oversee the construction, integrity and opera tions of tailings dams, which hold min ing waste, after the second collapse of a slimes dam in Brazil in the past three years.

“As an industry, we now have to redouble our efforts to make sure events like this simply cannot happen,” BHP CEO Andrew Mackenzie was quoted as saying.

Mining major Rio Tinto also disclosed infor mation on tailings facilities last week, reveal ing that its global standard was under review. It has 100 tailings facilities on 32 sites, as well as 36 tailings facilities that are closed or under rehabilitation. Twenty­one of the 100 are upstream construction facilities.

DIVERSIFIED MINERS

Taking StockGlencore auditing 140 slimes dams

NEWS&INSIGHT

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MARTIN CREAMER | CREAMER MEDIA EDITOR

IVAN GLASENBERG The big problem pertains to the upstream dams and we are working to ensure these are secure

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STORY HIGHLIGHTS• More than half of Glencore’s tailings storage

facilities are upstream dams, similar to the one at Vale’s Córrego do Feijao mine, in Brazil, which collapsed in January, killing 170 people.

• New upstream dams have been banned in Brazil and the decommissioning of existing upstream dam versions by August 2021 has been ordered.

NEWS&INSIGHT

8 MINING WEEKLY | March 1–7, 2019 AN

South Africa’s Kumba Iron Ore, which stands head and shoulders above its peers when it comes to

iron-ore quality, is achieving major price premiums well above historical heights.

Structural change and strong growth, particularly in the Chinese steel market, have placed the Anglo American company in pole position to receive record prices going forward.

In response to the structural changes, Kumba has enhanced its product portfolio, with its lump-to-fine ratio increasing to 68% from a prior 66%.

This has allowed the company to take advantage of the strong lump premium in the markets.

Kumba has also lifted the average iron content of its products to 64.5% and as a result, its market share of premium lump ore, with more than 65% iron content and, fine ore with above 64.5% iron content, more than doubled in 2018 to 30%.

“We aim to lift this further to 40%,” Kumba Iron Ore CE Themba Mkhwanazi told Mining Weekly.

It will do so by blending different intermediate products from Sishen and Kolomela, its two iron-ore mines in the Northern Cape.

This focus on quality is helping the company to achieve better prices.

Quality-improving Kumba generated a hefty operational cash flow, paid a generous 2018 cash dividend, pressed on with brownfield exploration in a new area and supported the creation of 2 600 new jobs in the local community during a fatality-free, safety-boosted year, characterised by higher prices for its products, better logistics and an improved relationship of cooperation with State rail enterprise Transnet.

Kumba exported 43.3-million tonnes of its sought-after product at an average price of $72/t, up from $71/t in 2017, to outperform its peers. The earnings before interest, taxes, depreciation and amortisation (Ebitda) margin rose by 3% to 45% on an Ebitda rise of 5% to R20.6-billion.

It has further diversified its customer portfolio, resulting in China now representing 56% of export sales, down from its two-thirds position of the past.

Price premiums measured against

the Platts 62 free-on-board (FOB) index have nearly trebled over the past three years to $17/t.

“Kumba continues to outperform its peers on FOB realised prices,” Mkhwanazi told Mining Weekly.

Its lump-to-fine ratio is the highest in the industry, as is the average iron content of its products, making its average realised FOB price of $72/t rise head and shoulders above those of its peers, with $2/t of the $72/t directly attributable to its quality focus.

The link between sales and operations has been strengthened to ensure that the production system is flexible and responsive to market changes and environmental protection demands.

Compared with the Platts 62 index price, Kumba’s realised prices widened from $6/t in 2015 to the current $17/t.

Kumba reduced its production by one-million tonnes between the second and third quarters of 2018, which offset high stock levels that fell from 6.6-million tonnes in the third quarter to 5.3-million tonnes in fourth quarter.

Chinese steel production rose for a second consecutive year to a record 928-million tonnes in 2018, buoyed 7% by investment in especially the property market.

New project starts, which were at the highest level after the global financial crisis of 2008, reached an all-time high.

Steel prices rose by 12% and high profitability incentivised mills to push for productivity gains.

On the supply side, for the first time in nearly two decades, seaborne iron-ore supply contracted in 2018.

There were supply disruptions in Brazil, South Africa and Australia and 30-million tonnes of low-grade supplies exited the market.

Kumba Iron Ore, which is renowned for its high-quality ore, achieved exceptional price premiums for its lumpy iron-ore in 2018, when it received a record annual average of $0.25c/dry metric tonne unit (dmtu). Currently, the premium is $0.34/dmtu.

Going forward, Kumba expects the lump premium to remain well above historical average prices, owing to tighter emissions controls in China, which not only escalates the cost of sintering but also displaces sintering from direct charge ores.

Historically, the Platts 65 index traded

at a 10% premium to the Platts 62 index, but, over the past two years, this premium increased sharply to 20% in 2017 and to more than 30% in 2018.

This increase is believed to be driven by structural changes in the Chinese steel industry and, as a result, Kumba expects this premium to average 20% going forward.

Firstly, this will result from the removal of 250-million tonnes of steelmaking capacity in China, which raised its 2018 steel capacity use to 77%, with further increases targeted.

Secondly, capacity has been reduced mainly as a consequence of smaller blast furnaces being closed and bigger blast furnaces using a higher proportion of direct charge products and high-grade ores.

Thirdly, the share of the top ten steelmakers in China is expected to nearly double to 60%, which is supportive of steel pricing and mill margins in China.

Permission to expand Kolomela into the adjacent Heuningkranz area presents an “exciting” opportunity to extend the life-of-mine and Mkhwanazi talks of the company having “significant value to unlock”, which includes the likely establishment of a dense-media-separation plant to convert low-grade material being 68% complete and on track for approval in the last quarter of this year. Production from the R2-billion to R3-billion Ultra High Dense Media Separation project is expected to start in the last quarter of 2022.

IRON-ORE

Price TailwindsPrice premiums boosting quality-focused Kumba Iron OreMARTIN CREAMER | CREAMER MEDIA EDITOR

To watch a video in which Mining Weekly’s Martin Creamer reports on Kumba Iron Ore, scan the barcode with your phone’s QR reader, or go to Video Reports on www.miningweekly.com.

THEMBA MKHWANAZI Kumba continues to outperform its peers on FOB realised prices

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AN MINING WEEKLY | March 1–7, 2019 9

NEWS&INSIGHT

Following the death of 58 mineworkers in occupational accidents in South Africa in 2018, Kumba Iron Ore

CE Themba Mkhwanazi last week drew attention to 2019 beginning globally with the tragic loss of life at Brumadinho, in Brazil, as a result of an iron-ore tailings dam collapse that killed 170 people, left at least 140 missing and caused major environmental damage.

Mkhwanazi said at Kumba’s presentation of 2018 results that the tragedy brought home the reality of the risks of mining and why the safety of its people should always come first and environmental protection should receive high priority.

Almost all the victims of the tailings dam catastrophe at Vale’s Córrego do Feijão iron-ore operation were workers at the mine and now the Brazilian company is taking an estimated 40- million tonnes of product out of the market, which is expected to lift iron-ore prices to between $71/t and $75/t going forward.

Mkhwanazi emphasised the importance of each mineworker being able to return home safely to loved ones “each and every day”.

Kumba, which has been fatality-free for three consecutive years, has linked safety to business performance through its incentive structures that reward positive safety behaviour.

Employee health and wellbeing are of equal important to the Anglo American group company, where a comprehensive health and wellness programme has been introduced to manage and prevent diseases.

The company, which operates the Sishen and Kolomela iron-ore mines, in the Northern Cape, is also continuing to achieve good results from its environmental sustainability programme, with no major environmental incidents reported for the third consecutive year.

It rehabilitated 130 ha, with an additional 2 500 ha assigned for biodiversity offsets.

“Our people are at the heart of our business and investing in them not only rewards them for their hard work, but also strengthens our business,” Mkhwanazi commented to Mining Weekly.

“We supported our employees and their families with R4.6-billion in salaries and benefits,” he added.

Product-quality-focused Kumba generated a hefty operational cash flow, paid a sizeable cash dividend, pressed on with brownfield exploration in a new area and supported the creation of 2 600 new jobs in the local community in a year of higher prices for its products.

It exported 43.3-million tonnes at an average price of $72/t, outperformed its peers and generated close to R19-billion in operational cash flow, buoyed by a flexible approach to production that lifted average product quality to an iron content of 64.5%, up from the previous 64.1% iron.

The South African fiscus received R4.1-billion in income tax and R1-billion in royalties.

In making way for mining at Dingleton, it has relocated 507 households to Siyathemba and built a school for 600 learners, as well as a multipurpose centre and police station. A new clinic and a youth centre are expected to be completed by year-end.

DIVERSIFIED mining and marketing company Glencore has capped its coal capacity at 150-million tonnes of coal a year, a figure that it is close to and it will not exceed.

The company has been working on the cap with its investors since 2016 in the interests of the transitioning to a low-carbon global economy.

This follows engagement with the investor signatories of the Climate Action 100+ initiative and Glencore’s recognition of climate change science as set out by the United Nations (UN)Intergovernmental Panel on Climate

Change, as well as its belief that the global response to climate change should pursue limiting temperatures, in line with the goals of the Paris Agreement, and support the UN Sustainable Development Goals, including universal access to affordable energy.

“We finally came to this agreement. This is where most sides are comfortable,” Glencore CEO Ivan Glasenberg said last week, when the company reported 8% higher earnings before interest, taxes, depreciation and amortisation (ebitda) of $15.8-billion and 5% higher net income before significant items of $5.8-billion.

On the impact of the coal cap on South Africa’s struggling State electricity utility, Eskom, he said in response to Mining Weekly: “We’re supplying large amounts of coal to Eskom, which we’ll

IRON-ORE

DIVERSIFIED MINERS

Grim Reminder

Coal capped at 150 Mt/y – Glencore

Brazil iron-ore tragedy brings home reality of mining risk – Kumba

STORY HIGHLIGHTS• Almost all the victims of the tailings dam

catastrophe at Vale’s Córrego do Feijão iron-ore operation were workers at the mine.

• Kumba, which has been fatality-free for three consecutive years, has linked safety to business performance.

• To page 13

To watch a video in which Mining Weekly’s Martin Creamer reports on Kumba Iron Ore, scan the barcode with your phone’s QR reader, or go to Video Reports on www.miningweekly.com.

MARTIN CREAMER | CREAMER MEDIA EDITOR

MARTIN CREAMERCREAMER MEDIA EDITOR

ENVIRONMENT FRIENDLY Glencore is using wind-turbine-generated energy in Canada and Australia

10 MINING WEEKLY | March 1–7, 2019 LO

The term ‘mining auction’ refers to a range of disposals in the mining sector, including the disposal of

scrap and/or surplus yellow equipment, assets from business rescue and/or liquidation, and the disposal of mining concessions, explains Hogan Lovells partner Nicholas Veltman.

The primary distinction between a bidding process and an auction process is that, under a bidding process, the actual disposal is preceded by an extensive due diligence phase and commercial negotiations, while, in an auction, assets are sold ‘as is’.

Bidders are reminded to review a potential purchase on the auctioneer’s website, with viewing typically scheduled a day prior to the auction to enable potential bidders to familiarise themselves with the condition of the goods.

The primary benefit of auctions is an objective and transparent disposal process where the highest bidder acquires the assets. “This also means that the seller, on auction, can get the highest possible

price for the assets,” Veltman comments.Aucor Auctioneers mining expert

Charles Neser notes that the bidder often represents a junior miner or a local equipment supplier that uses auctions to boost the supplier’s existing fleet without breaking the bank.

He says that auctions can promote local enterprise development by enabling smaller suppliers to acquire equipment and potentially refurbish and resell or rent it to mines.

Moreover, auction houses, particularly those based in traditionally rural areas, are also considered small enterprises, which Aucor and De Beers recognised in 2018 when partnering with, and empowering, Limpopo-based auction house Amagidi Auction, which would become a majority shareholder in Aucor Limpopo.

Park Village Auctions director Clive Lazarus noted in a press release in December that auctions were not only an efficient way of generating capital for sellers but also a mechanism for reducing

costs and optimising performance, with companies disposing of redundant assets, and curtailing holdings and maintenance costs.

The Auction ExperienceFifty people congregating in a truck

yard on the city outskirts on a dismally grey midweek morning is not necessarily a scene one associates with an auction.

The bid caller ran through a list of rules with the ease of a highly experienced flight attendant explaining the in-flight safety procedures. The most noteworthy remark by the caller was that every pro-spective bidder had to register his ore her identification number, in accordance with the provisions of the Financial Intelligence Centre Act and that bidders had to present proof of identification and proof of current residential address, together with proof of payment of a refundable deposit, prior to the auction.

A company representative required a cheque account letter, a South African Revenue Service certificate, a Companies

SPECIALFOCUS

MINING AUCTIONS

MEANS TO AN ENDAuctions an efficient way to generate cash, reduce costs

WIN-WINAuctions can assist with local enterprise development and are an efficient way of generating capital for sellers

NADINE JAMES | CREAMER MEDIA SENIOR STAFF WRITER

and Intellectual Property Registration Office printout and the company’s proof of address, as well as a proxy letter and the proxy’s identification document.

“Each lot is sold individually. If you win bids for two or more lots, you have to pay for all the lots that reflect on your invoice – you are not allowed to pick and choose after the fact,” the caller explained.

He added that the invoice would comprise the bid price, the buyer’s commission, documentation fees and value-added tax. Payment would have to be made before the end of the day.

Assets that are sold at an action are supposed to remain on the premises for the duration of the auction and until full payment has been made. However, they must be removed within a specified period, or a storage fee will be charged.

Despite starting off low, the bids at the auction described earlier quickly escalated to near-retail price for several lots, even for miscellaneous lots comprising items such as floodlights.

The auction moved quickly, with the first 17 lots sold within the first 15 minutes.

Meanwhile, the South African Institute of Auctioneers (SAIA) notes on its website that online auctions have broadened the base of buyers, as they no longer have to physically attend an auction. The digital process has also simplified the process for sellers and improved transparency.

Nonetheless, the SAIA says that South Africans still tend to prefer live auctions – this is supported by the institute’s 2018 finding that, in terms of movable assets, only about 30% were sold online that year.

The institute adds that, while live auctions are still the norm locally, that is not the case internationally. As a result, it expects the percentage of online auctions in South Africa to continue to increase.

Auctioning Mining ConcessionsLiquidity services and auction company GoIndustry Dovebid South Africa associate director John Taylor told Mining Weekly in May last year that the Lerala diamond mine, in the Palapye region of Botswana, was sold for more than $8-million in an online auction.

The transaction included the transfer of the mining licence and rights, a complete processing plant, a diesel generator plant,

electrical reticulation, workshops, offices and a mining camp.

The mine – owned by defunct Australian miner Kimberley Diamond Company – went into liquidation in mid-2017 after two years of poor sales, resulting in 130 job losses.

Hogan Lovells partner and mining head Warren Beech explains that, in South Africa, prospecting or mining rights can be auctioned off – typically using a bidding process – only after the mining rights have been granted or as a means of disposing of assets, as in the Lerala case.

However, while other jurisdictions allow governments or mining authorities to auction off rights or concessions, “the Mineral and Petroleum Resources Development Act (MPRDA) does not make specific provision for the auctioning off of mining concessions by government or the Department of Mineral Resources”.

Two of South Africa’s peers in the Brics bloc – India and Brazil – have held several concession auctions over the past six months to attract private investment, one of President Cyril Ramaphosa’s key priorities. (The other Brics member countries are Russia and China.)

In December, global news agency Reuters reported that Brazil planned to auction off about 20 000 tracts of land for mining exploration in the first half of 2019. The exploration rights had been revoked, prior to the government’s announcement, as permitting processes had stalled.

At the time, Brazil’s National Mining Agency – the new mining regulator launched in December as part of the new administration’s mining reform, which included a hike in mining royalties and changes to the mining code – had published a preliminary draft of the bid documents for the auction of two large mining concessions.

Bidding for these two concessions – Candiota, which boasts more than 20 ha of coal reserves, and Palmeirópolis, which shows evidence of zinc, lead and copper on a 5.5 ha plot – was expected to take place between December 13 and 17.

Meanwhile, in October, India’s Mines Ministry announced its intention to auction 102 mineral blocks before March 2019.

Mining Weekly reported last month that the Indian government even intended to offer ‘bundled’ mandatory approvals to

each successful bidder to reduce delays in securing approvals from different government agencies.

On completion of an auction round, the successful bidder would be offered a composite prospecting and mining licence, which would be bundled with mandatory approvals preapproved by government for each of the mineral blocks.

Beech notes that the auctioning off of mining concessions provides an immediate benefit for the State and is a demonstrable commitment from the bidder.

“The auction process in other jurisdictions is typically quicker than a mining application process under South African law. This means that, theoretically, at least, prospecting and mining operations can start sooner.”

However, Beech stresses that successful bidders would generally still have to acquire appropriate licences and authorisations; as a result, prospecting and mining activities could still be delayed.

He comments that there has been debate on whether an auction process should be provided under the MPRDA, adding that last year’s withdrawal of the MPRDA amendments might reignite the debate.

“A primary concern is whether bidders will comply with environmental laws,” Beech says, noting that, unlike the bidding processes, the MPRDA application processes provide for the rigorous vetting of applicants, especially in terms of committing to environmental-impact studies and social and labour plans, as well as rehabilitation plans.

Additionally, the Minister must be satisfied that the applicant can meet all the requirements under the MPRDA.

“These concerns, together with the concerns raised by communities . . . suggest that an auction process is currently not an appropriate option for South Africa. The application process is rigorous and, in my view, addresses the concerns to a large extent,” says Beech.

Regardless of whether mining concessions will ever be auctioned off by the State, local mining auctions are conducted quite frequently, and Veltman suggests that, given the challenges facing the mining sector and the local economy, in general, auctions will remain a prominent feature in the mining sector for years to come.

LO MINING WEEKLY | March 1–7, 2019 11

SPECIAL FOCUS ON MINING AUCTIONS CONTINUES ON PAGE 23. SOME HIGHLIGHTS:

• Online auctions an alternative option for mining companies – Page 28

• Mining auction changes provide room for growth – Page 29

Gold miner Pan African Resources achieved a 52.8% year-on-year increase in revenue to R1.3-billion

for the the six months to December 31, 2018.CEO Cobus Loots last week attributed

the higher revenue to an increase in gold production, which rose by 54.2% year-on-year to 81 014 oz on the back of robust per-for mances from the Barber ton Mines’ underground operations, the Barberton tailings retreatment plant (BTRP) and the newly com-missioned Elikhulu tailings retreatment plant (ETRP).

Commenting on the gold market in general, he said gold’s safe haven status was returning, with last year’s improvement in the dollar gold price continuing and ever-increasing geopolitical risk, as well as significant central bank demand and the “collapse” of bitcoin further endorsing gold’s fundamentals.

Loots added that, with expected rand weak-ness on top of a favourable gold price, this could be a good year for South African gold miners.

However, he suggested that the poor con-dition and subsequent impact on the min-ing sector of the local economy could not be under stated and that challenges remained.

Nonetheless, Pan African’s profit after tax increased by 136.8% year-on-year to R137.8-million, while its earnings before interest, taxes, depreciation and losses from dis-continued operations increased by 92.3% year-on-year to R342.5-million.

CFO Deon Louw noted that earnings per share had increased by 121.4% year- on-year to 7.15c and that headline earnings per share had increased by 135% to 7.15c, despite an increase in the weighted average number of shares.

The group achieved an all-in sustaining cost of $975/oz, a reduction of 23.1%, compared with the first half of the prior financial year.

Louw noted that financing Elikhulu’s con-struction resulted in the group’s net debt increas ing from R1.2-billion to R1.88-billion. “Net debt, we believe, has now peaked and the balance sheet should commence leveraging from these levels,” he added.

Further, he commented that the capital expendi ture (capex) of R587-million incurred during the period should also decline in the second half of the financial year, with the capex requirement for the Elikhulu tailings storage facility coming to an end in

the next few months.He noted that the suspension of the dividend

in 2018 was necessary but that the group remained committed to reintroducing a dividend “when it is expedient”

Operational PerformanceGold production from the Barberton complex was up 24.5% to 50 556 oz, benefiting from increased underground mining flexibility at the high-grade Fairview 272 and 358 mining platforms.

The BTRP also improved production, on the back of the successful commissioning of a regrind mill in May 2018.

The ETRP con tributed 15 292 oz in its first four months of opera tion and reached its nameplate capacity of one-million tonnes throughput in October 2018.

Pan African noted that the incorporation of the existing 200 000 t/m Evander tailings retreat ment plant throughput capacity into Elikhulu had increased the latter’s processing

capacity to 1.2-million tonnes a month.Loots expects the group to achieve produc-

tion guidance of about 170 000 oz for the full year.

“We have a very attractive internal growth profile,” Loots stated, noting that the group had reversed the declining trend of production at the Barberton underground operation. Moreover, the group will progress to the next 11-block high-grade Platform 256 in July.

Drilling at Barberton Mines’ Royal Sheba prospect was completed, indicating a near-surface mineral resource of 370 000 oz, with a 900 m strike and a 150 m down-dip extension. The total mineral resource is now 760 000 oz, comprising the near-surface resource of 370 000 oz and the underground mineral resource of 390 000 oz.

The feasibility study on the Royal Sheba project, which will include a review of possible near-term improvements to underground ore handling logistics, infrastructure and existing processing plant throughput capacity, is on track to be completed by next month.

ViabilityThe group is also investigating the viability of Project Dibanisa, which will transfer ore from the Sheba mine to the Fairview infra-struc ture, saving costs and freeing up the Sheba infrastructure (the shaft and plant) for use for the Royal Sheba project.

Additionally, Loots noted that a feasibility study on Evander’s Shaft 8 pillar project was under way.

The project would have a life-of-mine of three years, with a throughput of 11 500 t/m, producing about 30 000 oz/y.

The project will have a minimal capital requirement of R40-million, and the board’s final investment decision is expected next month.

Pan African has also started an extended exploration drilling programme at Barberton Mines’ mining right at New Consort Mine, targeting the Main Maiden Reef orebody as a potential satellite deposit for the Royal Sheba project.

Meanwhile, Evander Mines’ Egoli project remains a viable underground mining project and the group is reviewing options to advance the project. “These projects, together with improvements to our underground ore handling and pro cess ing plant infrastructure, have the potential to significantly boost Barberton Mines’ produc tion in the coming years,” Loots concluded.

NEWS&INSIGHT

GOLD

Glittering ResultsPan African half-year revenue up 52.8% year-on-year to R1.3-billion

12 MINING WEEKLY | March 1–7, 2019 RA

NADINE JAMES | CREAMER MEDIA SENIOR STAFF WRITER

MINING WEEKLY COUPON ON PAGE 13 E512409

To watch a video in which Pan African Resource CEO Cobus Loots discusses the group’s half-year results, scan the barcode with your phone’s QR reader or go to ‘Video Reports’ on www.miningweekly.com.

COBUS LOOTS Gold’s safe haven status is returning, with an improved dollar gold price and ever-increasing geopolitical risk, and significant central bank demand endorsing gold’s fundamentals

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NEWS&INSIGHT

A consortium led by State-owned mining company Afr ican Explorat ion

Mining & Finance Corporation (AEMFC) has been awarded the postcommencement funding (PCF) bid for Optimum Coal and its associated assets to the value of R1-billion.

PCF is finance granted to a company in business rescue and is meant to address the business rescue practitioners’ (BRPs’) remuneration, employee costs, working capital and other means of maximising the probability of a successful turnaround.

The consortium, which includes coal and chrome beneficiation and trading company Lurco Group, stated that, together with the BRPs, it was expected to conclude the details of the management contract – with an option to buy the assets – relatively soon.

Ownership of Optimum is still subject to an ongoing bidding process.

In the statement released last week, the BRPs’ lead lawyer, Bouwer van Niekerk, said it had been a “robust and rigorous” process to identify the r ight partner to ensure sustainability for the Optimum assets, including the Optimum coal mine and coal terminal.

He adde d t ha t t he BR Ps considered both the capacity t o d e l ive r on t h e f u nd i ng requirements and a proven ability to manage and operate the mine and bring it back to optimal production.

Funding will be used to pay workers, suppliers and creditors, as well as to recapitalise the mine.

AEMFC st ressed that the compensation of workers was a critical priority; so, too, was ach iev ing sha red va lue by providing a structure in which the workforce and communities in the

vicinity of the assets would benefit from ownership in the asset and operations.

“We are confident that the PCF award to the AEMFC consor-tium will see the prioritisation of sustainable employment and operational efficiency, while keeping energy secur ity for South Africa at the centre of its strategy.”

The A EM FC consor t ium c on f i r me d t h a t i t h a d t he guaranteed funding ability and operational expertise to create a commercially viable business and that it planned to exercise its right to acquire the mine as soon as the litigation was resolved.

L u r c o G r o u p C E O a n d cofounder Ellington Nxumalo affirmed that the consortium’s funding had been raised by its members with the assistance of private capital.

“Secur ing South Afr ica’s energy supply, [while] saving jobs, driving transformation, leveraging sustainable investment and restoring the reputation of South Africa as a key resources player, should be a non-negotiable business imperat ive for a l l committed sector leaders,” stated Central Energy Fund (CEF)chairperson Luvo Makasi.

He added that the CEF was encouraged by the consortium’s com m itment to del iver ing a solut ion based on “sound commercial fundamentals”.

AEMFC CEO Sizwe Madondo added that the company was “delighted” to have been awarded the PCF deal as it believes that it is of national significance and is fundamental to the country’s energy security.

“Through our consortium team of reputable and experienced sector experts, we are confident we can deliver the sustainable Optimum Coal that South Africa both deserves and needs.”

continue to help.”At the same time, he made

clear that the company would not be building any new coal mines, but would be maintaining the current output of 150-million tonnes of coal a year.

“We do have to invest in capital expenditure anyway to maintain these tonnes, so I don’t think it will be affecting world supply right now,” Glasenberg said in response to Mining Weekly.

It aims to limit coal production capacity broadly to current levels and to play a key role in enabling a transition to a low-carbon economy.

On Eskom’s application for high electricity tariffs, the pending imposition of a carbon tax in South Africa and the impact this could potentially have on Glencore’s ferrochrome businesses in South Africa, he said: “I don’t know exactly where that tax is going right now. We haven’t

had the final outcome on it, so we’ve got to see.

“The ferrochrome business naturally does certainly get affected by higher power prices and it’s competing with ferrochrome production in China right now, with a large amount of chrome ore being exported from South Africa.”

Glencore has a 3 MW wind turbine installed at the Raglan nickel mine, in the northern part of Quebec, renewable power and gas capture initiatives in Australia and hydropower in places.

Glencore’s 2018 ebitda increased 8% to $15.8-billion and net income before significant items rose 5% to $5.8-billion. Cash generation underpinned $5.2-billion of announced shareholder returns and buy-backs.

Coal ebitda at $5.2-billion outdid copper zinc and nickel ebidta. Coal ebitda in 2019 is expected to be $5.4-billion.

COAL

Shot in the ArmState-owned AEMFC awarded PCF bid to the tune of R1bn

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The magazine that brings results

DATE OF EDITION 01/03/2019

• From page 9

NADINE JAMES | CREAMER MEDIA SENIOR STAFF WRITER

14 MINING WEEKLY | March 1–7, 2019 RA

Name of the ProjectOlaroz lithium facility – Stage 2 expansion project.LocationThe project is located in Jujuy province, in northern Argentina.ClientThe project is a joint venture between Orocobre and Toyota Tsusho Corporation.Project DescriptionThe first sale of lithium carbonate from the Olaroz lithium facility started in late April 2015 and volumes have been increasing since then.The Stage 2 expansion will increase lithium carbonate production capacity by about 25 000 t/y, bringing total Olaroz production capacity to an estimated 42 500 t/y. The expansion will produce technical-grade lithium carbonate (>99%), part of which will be used as feedstock for the proposed Naraha lithium hydroxide plant to be built in Japan.During the development of Stage 2, the Stage 1 plant will progressively migrate to 100% battery-grade lithium carbonate production. Once full production rates have been achieved, the product distribution post Stage 2 is expected to be:• 17 500 t/y of battery-grade lithium carbonate;• 9 500 t/y technical-grade lithium carbonate as feedstock for 10 000 t/y battery-grade lithium hydroxide production at the Naraha lithium hydroxide plant; and• 15 500 t/y of technical-grade lithium carbonate.Potential Job CreationNot stated.Net Present Value/Internal Rate of ReturnNot stated.ValueThe capital expenditure for Stage 2 is expected to be $295-million, including $25-million contingency. This estimate excludes the crystalliser/evaporator project, which will operate for Stage 1 and Stage 2 on which feasibility studies are currently being undertaken. The expected cost of this project is about $15-million and will be subject to normal joint venture capital approval processes in due course.DurationCommissioning of Stage 2 at Olaroz and the Naraha lithium hydroxide plant are expected to occur during the second half of 2020.Latest DevelopmentsNone stated.Key Contracts and SuppliersNone stated.On Budget and on Time?Too early to state.

Contact Details for Project InformationOrocobre, tel +61 7 3871 3985 or email mail@orocobre.com.au.

Name of the ProjectMabesekwa coal independent power producer project.LocationThe project is located about 50 km south-east of Botswana’s second largest city, Francistown.ClientKibo Energy.Project DescriptionMabesekwa is envisaged as a coal-based integrated mine-mouth power plant with the potential to incorporate a solar component.It currently comprises a 303-million-tonne South African Code for the Reporting of Mineral Resources and Mineral Reserves-compliant coal resource, with water- and land-use permits and environmental certification in place.Scoping and prefeasibility studies on the coal mine envision a power plant with a maximum capacity of 600 MW (4 × 150 MW) based on a coal delivery rate of 3.2-million tonnes a year and a life-of-mine of more than 30 years.Potential Job CreationNot stated.Net Present Value/Internal Rate of ReturnNot stated.ValueNot stated.DurationNot stated.Latest DevelopmentsA definitive feasibility study is under way.Key Contracts and SuppliersNone stated.On Budget and on Time?Not stated.Contact Details for Project InformationKibo Energy, tel +353 91 511463, fax +353 91 511463 or email info@kibo.energy.

Name of the ProjectRenard diamond mine expansion.LocationQuebec, Canada.ClientStornoway Diamonds.Project DescriptionRenard diamond mine transitioned to underground mining in 2018.Stornoway is investigating the potential for openpit mining at the Renard 4 and nearby

Renard 9 kimberlites to supply additional ore feed earlier in the diamond mine’s life.Such a pit would allow for the extraction of a portion, or all, of the estimated two-million carats of diamonds in the top 140 m of Renard 4.These diamonds are contained within the project’s indicated mineral resources, but are outside the current mineral reserve as they occur in the area of the proposed crown pillar for the Renard 4 underground mine.An openpit would require a water retention structure within the Lagopède Lake. If successful, the openpit will enable Stornoway to take advantage of the expanded plant processing capacity offered to the new ore-sorting circuit.Potential Job CreationNot stated.Net Present Value/Internal Rate of ReturnNot stated.ValueNot stated.DurationNot stated.Latest DevelopmentsThe results of the current sampling programme at the mine will be used to support an eco-nomic assessment for the development of a Renard 4-Renard 9 openpit.Key Contracts and SuppliersNone stated.On Budget and on Time?Not stated.Contact Details for Project InformationStornoway Diamonds manager – investor relations and business development Alexandre Burelle, tel +1450616 5555 or email aburelle@stornowaydiamonds.com.

Name of the ProjectKhemisset potash project.LocationNorthern Morocco.ClientEmmerson PLC.Project DescriptionA scoping study has confirmed Khemisset’s potential to be a low capital-cost and high-margin potash mine.The study is based entirely on the Joint Ore Reservess Committee- (Jorc-) compliant inferred mineral resource estimate of 311-million tonnes at an average grade of 10.2% potassium oxide (K2O) and delivers an initial mine life of 20 years.Envisaged is the mine’s extracting about six-million tonnes of run-of-mine ore, with an average grade over the life-of-mine (LoM) of 9.35% K2O.Processing will be undertaken using a hot

COMING UP COMING UPAn updated feasibility study has confirmed Explaurum’s Tampia gold project, in Australia, as technically sound and robust. The updated study envisages an openpit mining operation using an excavator/truck mining fleet and the Tampia standalone processing plant

A prefeasibility study on Australian Vanadium’s Gabanintha vanadium project, in Australia, has shown it to have a well-defined resource base and robust economics using an industry standard, low-risk method of beneficiation and refining to produce a vanadium pentoxide flake product

PROJECTSINPROGRESS

By Sheila Barradas

OLAROZ LITHIUM FACILITY – STAGE 2 EXPANSION PROJECT

RENARD DIAMOND MINE EXPANSION

KHEMISSET POTASH PROJECT

MABESEKWA COAL INDEPENDENT POWER PRODUCER PROJECT

www.roytec.co.za*Translation: Quality & Craftsmanship

At Roytec we are proud of the relationships we have built with our Chinese partners, working together allows us to deliver equipment of the highest standard at a much better cost. We believe that quality is never an accident; it is always the result of high intention, sincere e�ort, intelligent direction and skillful execution.

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leaching and crystallisation process to extract and purify the potassium chloride in the ore into saleable grade K60 muriate of potash. Over the LoM, the process plant will deliver an average of about 800 000 t/y of K60 product for sale.Potential Job CreationNot stated.Net Present Value/Internal Rate of ReturnThe project has an after-tax net present value, at a 10% discount rate, of $795-million and an internal rate of return of 29.8%, with a payback of 3.25 years.Value$405.9-million, including a $90.4-million contingency.DurationNot stated.Latest DevelopmentsThe scoping study has given Emmerson the confidence to progress with its strategy to rapidly derisk the project and move it towards production. Work streams for 2019 include infill and exploration drilling to confirm and expand the mineral resources at the project, as well as upgrading the current Jorc-compliant inferred mineral resource estimate.The company will also undertake a metallurgical testwork programme to confirm process flowsheets for a prefeasibility study, which will start thereafter.Simultaneously, Emmerson will start environmental- and social-impact assessments and the mine permitting process.Emmerson has said that it is fully funded to undertake development work until the first quarter of 2020.Key Contracts and SuppliersGolder Associates (scoping study) and the Australasian Institute of Mining and Metallurgy(design and estimates).On Budget and on Time?Not stated.Contact Details for Project InformationEmmerson PLC, tel +44 207 236 1177.

Name of the ProjectSepik Development Project.LocationPapua New Guinea (PNG).ClientPanAust (80%) and Highlands Pacific (20%).Project DescriptionThe project comprises four elements.The Sepik infrastructure project (SIP) involves the externally owned and funded development of regional infrastructure as a prerequisite to construction of other components of the project and includes:

• the upgrade and expansion of the Port of Vanimo• the upgrade of a 188 km road south of the port on the northern coast of PNG to the Green River district, and construction of a further 221 km road from Green River to Telefomin, including a 350 m bridge over the Sepik river, to enable access to the mine site and proposed hydroelectric power station.• the establishment of a regional airport facility at Green River for commercial use, suitable for 50 seat fixed wing aircraft.• the installation of a fibre-optic cable to connect to an international service provider and Vanimo.The Frieda River copper/gold project (FRCGP) involves the construction of a mine, process plant and slurry pipeline to Vanimo port.The mine is based on the Horse-Ivaal-Trukai, Ekwai and Koki porphyry copper/gold deposits and will potentially include the Nena epithermal copper/gold deposit. Together, these deposits contain an estimated 13-million tonnes of copper and 20-million ounces of gold, representing one of the largest undeveloped copper resources in the world.A large-scale openpit mine will feed ore from the HITEK deposits to a conventional comminution and flotation process plant that will produce a copper/gold concentrate.The concentrate will be piped through a 340 km buried pipeline to Vanimo where it will be dewatered for export.Mine waste rock and process tailings will be stored under water within the hydroelectric dam reservoir.Production will average 670 000 t/y of concen-trate containing 175 000 t of copper and 230 000 oz of gold over the 33-year mine life.Potential Job CreationNot stated.Net Present Value/Internal Rate of ReturnThe FRCGP and FRHEP together have a post-tax net present value, at an 8% discount rate, of $1.8-billion and an internal rate of return of 11%.ValueThe SIP is estimated at $739-million, to be funded by government and/or public–private partnerships.The preproduction capital cost of the FRCGP – the mine and associated process plant – is estimated at $2.8-billion. This excludes the $351-million cost of the concentrate pipeline and the $143-million cost for mining fleet.The total installed capital cost of the FRHEP is estimated at $3.2-billion.The SPGP has an estimated capital cost of $418-million, including the cost of a rural electrification network.DurationThe FRCGP and are expected to take seven years to implement.

Latest DevelopmentsNone stated.Key Contracts and SuppliersNone stated.On Budget and on Time?Too early to state.Contact Details for Project InformationPanAust, tel +617 3117 2000 or email info@panaust.com.au.

Name of the ProjectRönnskär copper smelter expansion.LocationThe project is located in Skelleftehamn, Sweden.ClientBoliden Group.Project DescriptionBoliden plans to increase capacity in the converter aisle and sulphuric acid plant at Rönnskär. This will increase the smelter operation’s capacity to process raw material by about 12%.Potential Job CreationNot stated.Net Present Value/Internal Rate of ReturnNot stated.ValueSKr350-million.DurationThe project is expected to be commissioned at the beginning of 2021.Latest DevelopmentsNone stated.Key Contracts and SuppliersNone stated.On Budget and on Time?Too early to state.Contact Details for Project InformationBoliden Group, tel +46 8610 1523, fax +46 70291 5780 or email olof.grenmark@boliden.com.

RA MINING WEEKLY | March 1–7, 2019 15

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Media’s Research Channel Africa. Email: subscriptions@creamermedia.co.za

Readers of Mining Weekly are requested to email details of projects to Sheila Barradas at

sheila@engineeringnews.co.za

SEPIK DEVELOPMENT PROJECT

RÖNNSKÄR COPPER SMELTER EXPANSION

Renewable energy has become a very important part of the conversation in mining, says energy solutions

provider MD for Africa John Lewis who attended the 2019 Investing in African Mining Indaba held in Cape Town last month.

Aggreko provides power for mining companies, utilities and other corporates in more than 20 countries across Africa. The company focuses on solving clients’ challenges to provide cost-effective, reliable, flexible and greener solutions worldwide.

“We are one of the biggest and most

established providers of mobile power solutions in the world, and on the African continent.

“We came to Mining Indaba to build on the relationships we already have with our many existing clients and to build new ones as we educate the market about our solutions, which include hybrid technologies incorporating renewable energy and smart energy storage,” he says.

Renewable-power solutions are grow-ing across African mining projects, as they offer a complementary solution to ther-mal generation and can reduce fuel costs

and ensure reliable power 24/7. Lewis says the lack of reliability in energy generation and distribution in Africa – especially in remote locations – the volatility of fuel costs and the maintenance of power equip-ment are some of the challenges regarding energy in mining.

“Power is central to an effective mining operation and constitutes a key investment decision for management teams, govern-ments and investors. Aggreko has a range of solutions already implemented for clients and these solutions integrate solar and

16 MINING WEEKLY | March 1–7, 2019 LO

Indaba created positive platform – Baxter Page 22

Foundation driving youth participation in mining industry Page 23

MINING INDABA REVIEW

Compiled by MAMAILI MAMAILA

For further information contact: Head of Conferencing, Camielah Jardine Tel: +27 11 834-1273/7 • Fax: +27 11 833-8156 or +27 11 838-5923 • E-mail: camielah@saimm.co.za • Website: http://www.saimm.co.za

Swakopmund Hotel, Swakopmund, Namibia11–12 March 2019

7th Sulphur and Sulphuric Acid 2019 Conference

Energy solutions crucial to the future of mining

ENERGY SOLUTIONSPower is central to an effective mining operation

and constitutes a key investment decision for management teams, governments and investors

• To page 18

MAMAILI MAMAILA | CREAMER MEDIA REPORTER

smart storage solutions into our existing generator-based solutions,” he says.

State of MiningAggreko has been encouraged by the high quality of mining companies that have operations across the continent with which it has made contact at the Indaba. The company is pleased with the potential of these companies, as it bodes well for the industry’s continued health and success.

“We have met some outstanding manage-ment teams and enjoyed the engagement we have had with African governments

from across the continent,” says Lewis.They share the view of many investors and

mining companies – that the local mining industry holds incredible potential. Lewis says the industry is moving away from being dominated by deep-level mining and is evolving in line with international norms as health and safety and environmental standards change.

“The conversations we have had with mining companies during Mining Indaba indicate a mood of cautious optimism as the Mining Charter, a new mining Minister, a plan to restructure Eskom and greater certainty on policy begin to have an impact on the industry. We are encouraged by the many quality projects that are under way in the country and we see a bright future for South African mining.”

Aggreko’s partnerships within the mining

industry reflect its understanding of the sector and how to address its challenges. Lewis states that they will continue to build on its reputation as a key player in mining. Aggreko believes that the new energy world will continue to evolve and present exciting and inspiring challenges.

Lewis concludes that increasing the growth of Aggreko’s business with mining clients, utilities and industries across Africa is their focus. “We will continue to innovate and leverage our expertise and commitment to research and technology to cut costs, provide cleaner energy and deliver highly effective solutions no matter the territory, commodity or type of solution needed. Our business model enables us to produce power wherever it’s needed in the shortest timeframe.”

Following President Cyril Ramaphosa’s speech regarding the Fourth Industrial Revolution (4IR) at this year’s Investing

in African Mining Indaba, mining companies made it clear that there will be some change in the near future as people start believing in practical impact of digitalisation and tech-nology a lot more, says global engineering company Aurecon Group resources client director Dr Eduard Vorster.

“Based on the mine companies’ responses, jobs within mining per se may not be created at the same rate of change. Thus, focusing outside mining is becoming so much more important – to transform that space so that the mine is a catalyst for a macro economy rather than solely

relying on the mines for job creation.”In December 2018, government invited

the publ ic to nominate candidates to serve on the Presidential Commission on the 4IR. The commission will identify what strategies, policies and plans South Africa should put in place to position itself as a leading country in the technology revolution.

At the Indaba , Minera l Resources Minister Gwede Mantashe spoke about collaboration between mining companies even across borders, with the message to further encourage growth in the industry and create sustainable mining industries; sustainability for mining companies and the way companies interact with the community

and the environment, says Vorster.“Some companies even stated outright that,

in future, they may not be allowed to mine the resource in the first place without being aligned with communities. A very strong strategic alignment would be required.”

He believes that the country has the tools needed to solve the infrastructure issue so that mines can engage in more exploration projects. “This brings huge opportunities for mining companies, consultants and gov-ernments to streamline their work rate.”

It seems that, for the time being, there will be a dearth of capital expenditure and a focus on stay-in-business spending until those issues are solved, but there will seemingly also be many other opportunities as business is unlocked for future agriculture, energy and water use, he mentions.

Further, Vorster highlights the reposi-tioning around coal. “In the South African environment – which is slightly different from elsewhere – the importance of coal and the notion that, at least in the short term, there will be repositioning regarding the delivery and mining thereof, is very inter-esting, as while some players have started to divest, new players are entering the markets, bringing a fresh approach to the industry in South Africa.”

4IR: Mining companies need to make a wilful change

18 MINING WEEKLY | March 1–7, 2019 LO

MINING INDABA REVIEW

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MAMAILI MAMAILA | CREAMER MEDIA REPORTER

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Gulfstream Energy is a supplier of quality and innovative petroleum solutions to a wide range of customers within all market sectors of the South African economy. Founded in 2009, Gulfstream has built a solid reputation as a reliable customer-focused

supplier of quality fuels, flexible and efficient service, and a willingness to go the ‘extra mile’.

We are proud to have partnered with Vedanta Zinc International’s Gamsberg mine since the inception of the project in July 2015.

Gamsberg mine, located in Aggeneys, Northern Cape, currently comprises an openpit mine where one of the largest known undeveloped zinc ore bodies in the world is being exploited and which will, in the near future, feature a dedicated processing plant.

The installation of our vendor-managed inventory (VMI) system has proven to be of significant value at Gamsberg mine, where the responsibility for fuel supply and management rests squarely with Gulfstream Energy. The project, currently in Phase 1 with an estimated life-of-mine of 13 years, sees an average over 2-million litres of diesel dispensed through the tanks on a monthly basis.

The permanent installation of the VMI system has removed the burden

of fuel procurement and management from Vedanta. Gamsberg’s General Manager Mubarik Khan expressed gratitude to Gulfstream’s dedicated team at the mine stating that “Gulfstream deals with all the headaches relating to fuel supply, enabling us to focus on our core business of mining”.

At Gulfstream, we place a premium on relationships and are proud of the collaborative approach to problem-solving on the mine between Gulfstream’s on-site team and Vedanta mine management. Mining Manager Johan Meyer congratulated Gulfstream’s on-site team for their sterling

performance to date and unrivalled commitment to working side by side with Vedanta ensuring uninterrupted production on the 24/7 mining operation.

The journey from a temporary installation at the outset to the permanent installation with a total capacity of 470 000 litres was not without challenges. “Gulfstream has racked up extensive

experience in supplying fuel to mines but the installation and staffing of a VMI solution was a new threshold that we’ve crossed successfully,” says Michael Leon, Gulfstream’s Mining and Technical Manager.

Mine Engineer Mario Cloete played a pivotal role in the development phase of the VMI system installation ensuring that the design was compliant

with industry standards. He commended Gulfstream on its support of local business in the process to become operational, citing the strategic importance of community development to Vedanta.

Further, during the transition phase to the permanent installation, while the mine was ramping up production, Gulfstream installed an additional self-bunded tank at its own cost to ensure that stock levels were maintained during this period. Gulfstream’s anticipation that stock levels may run low and mitigating this scenario through the provision of an additional tank was “fantastic customer service”, says Mubarik Khan. The high level of teamwork and communication between Gulfstream and Vedanta underpinned the success of the permanent installation where tanks needed to be safely emptied before being moved. This demonstration of collaboration and customer service was “a commendable display of consistent performance”, according to Mario Cloete.

Similarly, Gulfstream’s recognition of the vital importance of stringently complying with HSEQ (Health, Safety, Environment and Quality) standards has not gone unnoticed. John Meyer stated that “from a safety perspective, I have not had one complaint about Gulfstream Energy”.

Despite the remoteness of the location, the vendor managed inventory installation at Gamsberg mine is fuelled predominantly from the Burgan Cape storage terminal, in Cape Town harbour, where Gulfstream holds a monthly storage position of 8.5-million litres of diesel. However, with Gulfstream’s extensive footprint of 30 supply points nationally, the mine has on occasion been fuelled via supply from as far afield as KwaZulu-Natal. Gulfstream CEO Shane Jegels confidently reassured Vedanta’s top management of Gulfstream’s commitment to the partnership by maintaining

the current scenario of zero stock-outs.VMI systems on large scale operations such as mines are generally

considered the domain of the oil majors. It is a feather in Gulfstream’s cap to unofficially be rated higher than an oil major in delivering its VMI at Gamsberg mine, and a testament to the capability and willingness of Gulfstream’s team.

We are grateful to Vedanta Zinc International for the opportunity to showcase our competency at Gamsberg mine and are proud that we’re able to fulfil our mission of “Making business easy” in the mining sector.

PROUD PARTNERSHIPwith Vedanta ZincInternational

“Gulfstream deals with all the headaches relating to fuel

supply, enabling us to focus on our core business of mining”

“Gulfstream depot staff work shifts to ensure constant availability of supply

to meet the mine’s requirements”

www.gulfstreamenergy.co.za | 011 100 7100

Please contact our Mining and Technical Manager Michael Leon for all fuelling requirements | 082 552 6606 | michael@gulfstreamenergy.co.za

Gulfstream’s leadership with Gamsberg mine’s top management

From left to right: Mabore Rasebotsa, Gulfstream Finance Manager: Nomsa Masangu, Gulfstream General

Manager: Operations: Mubarik Khan, Gamsberg Mine General Manager: Jolyn Jegels, Gulfstream

Executive Director: Johan Meyer, Gamsberg Mining Manager: Mario Cloete, Gamsberg Mine Engineer

Benefits of Gulfstream’s VMI

Accurate tracking of fuel consumption through daily, weekly and monthly reporting

Fuel input, output and current stock levels are recorded

Cost savings as billing only occurs once fuel is dispensed

Positively impacts on productions planning and fuel management

FAST FACTS

Gulfstream’s Vendor-Managed Inventory Solution at Black Mountain mine• 2 x 69 000 litre self-bunded tanks• 4 x 83 000 litre tanks in containment• 3 x high-speed dispensing pumps • 1 x normal speed kerb-side pump for light vehicles • 2 x high-speed offloading pumps to offload bulk delivery trucks• Integrated Fuel Management System with cloud-based technology allowing for remote access to real-time information and reporting

“From a safety perspective, I have not had one complaint

about Gulfstream Energy”

Gulfstream Energy is a supplier of quality and innovative petroleum solutions to a wide range of customers within all market sectors of the South African economy. Founded in 2009, Gulfstream has built a solid reputation as a reliable customer-focused

supplier of quality fuels, flexible and efficient service, and a willingness to go the ‘extra mile’.

We are proud to have partnered with Vedanta Zinc International’s Gamsberg mine since the inception of the project in July 2015.

Gamsberg mine, located in Aggeneys, Northern Cape, currently comprises an openpit mine where one of the largest known undeveloped zinc ore bodies in the world is being exploited and which will, in the near future, feature a dedicated processing plant.

The installation of our vendor-managed inventory (VMI) system has proven to be of significant value at Gamsberg mine, where the responsibility for fuel supply and management rests squarely with Gulfstream Energy. The project, currently in Phase 1 with an estimated life-of-mine of 13 years, sees an average over 2-million litres of diesel dispensed through the tanks on a monthly basis.

The permanent installation of the VMI system has removed the burden

of fuel procurement and management from Vedanta. Gamsberg’s General Manager Mubarik Khan expressed gratitude to Gulfstream’s dedicated team at the mine stating that “Gulfstream deals with all the headaches relating to fuel supply, enabling us to focus on our core business of mining”.

At Gulfstream, we place a premium on relationships and are proud of the collaborative approach to problem-solving on the mine between Gulfstream’s on-site team and Vedanta mine management. Mining Manager Johan Meyer congratulated Gulfstream’s on-site team for their sterling

performance to date and unrivalled commitment to working side by side with Vedanta ensuring uninterrupted production on the 24/7 mining operation.

The journey from a temporary installation at the outset to the permanent installation with a total capacity of 470 000 litres was not without challenges. “Gulfstream has racked up extensive

experience in supplying fuel to mines but the installation and staffing of a VMI solution was a new threshold that we’ve crossed successfully,” says Michael Leon, Gulfstream’s Mining and Technical Manager.

Mine Engineer Mario Cloete played a pivotal role in the development phase of the VMI system installation ensuring that the design was compliant

with industry standards. He commended Gulfstream on its support of local business in the process to become operational, citing the strategic importance of community development to Vedanta.

Further, during the transition phase to the permanent installation, while the mine was ramping up production, Gulfstream installed an additional self-bunded tank at its own cost to ensure that stock levels were maintained during this period. Gulfstream’s anticipation that stock levels may run low and mitigating this scenario through the provision of an additional tank was “fantastic customer service”, says Mubarik Khan. The high level of teamwork and communication between Gulfstream and Vedanta underpinned the success of the permanent installation where tanks needed to be safely emptied before being moved. This demonstration of collaboration and customer service was “a commendable display of consistent performance”, according to Mario Cloete.

Similarly, Gulfstream’s recognition of the vital importance of stringently complying with HSEQ (Health, Safety, Environment and Quality) standards has not gone unnoticed. John Meyer stated that “from a safety perspective, I have not had one complaint about Gulfstream Energy”.

Despite the remoteness of the location, the vendor managed inventory installation at Gamsberg mine is fuelled predominantly from the Burgan Cape storage terminal, in Cape Town harbour, where Gulfstream holds a monthly storage position of 8.5-million litres of diesel. However, with Gulfstream’s extensive footprint of 30 supply points nationally, the mine has on occasion been fuelled via supply from as far afield as KwaZulu-Natal. Gulfstream CEO Shane Jegels confidently reassured Vedanta’s top management of Gulfstream’s commitment to the partnership by maintaining

the current scenario of zero stock-outs.VMI systems on large scale operations such as mines are generally

considered the domain of the oil majors. It is a feather in Gulfstream’s cap to unofficially be rated higher than an oil major in delivering its VMI at Gamsberg mine, and a testament to the capability and willingness of Gulfstream’s team.

We are grateful to Vedanta Zinc International for the opportunity to showcase our competency at Gamsberg mine and are proud that we’re able to fulfil our mission of “Making business easy” in the mining sector.

PROUD PARTNERSHIPwith Vedanta ZincInternational

“Gulfstream deals with all the headaches relating to fuel

supply, enabling us to focus on our core business of mining”

“Gulfstream depot staff work shifts to ensure constant availability of supply

to meet the mine’s requirements”

www.gulfstreamenergy.co.za | 011 100 7100

Please contact our Mining and Technical Manager Michael Leon for all fuelling requirements | 082 552 6606 | michael@gulfstreamenergy.co.za

Gulfstream’s leadership with Gamsberg mine’s top management

From left to right: Mabore Rasebotsa, Gulfstream Finance Manager: Nomsa Masangu, Gulfstream General

Manager: Operations: Mubarik Khan, Gamsberg Mine General Manager: Jolyn Jegels, Gulfstream

Executive Director: Johan Meyer, Gamsberg Mining Manager: Mario Cloete, Gamsberg Mine Engineer

Benefits of Gulfstream’s VMI

Accurate tracking of fuel consumption through daily, weekly and monthly reporting

Fuel input, output and current stock levels are recorded

Cost savings as billing only occurs once fuel is dispensed

Positively impacts on productions planning and fuel management

FAST FACTS

Gulfstream’s Vendor-Managed Inventory Solution at Black Mountain mine• 2 x 69 000 litre self-bunded tanks• 4 x 83 000 litre tanks in containment• 3 x high-speed dispensing pumps • 1 x normal speed kerb-side pump for light vehicles • 2 x high-speed offloading pumps to offload bulk delivery trucks• Integrated Fuel Management System with cloud-based technology allowing for remote access to real-time information and reporting

“From a safety perspective, I have not had one complaint

about Gulfstream Energy”

The 2019 Investing in African Mining Indaba was a useful platform where stakeholders worldwide, including

producers, investors and government offi-cials discussed the issues facing the mining industry, and the opportunities that would enable the industry to achieve its full poten-tial, says mining industry employers organ-isation Minerals Council South Africa CEO Roger Baxter.

He states that, over several years, signifi-cant efforts have been made by the organisers of the Indaba to ensure that the conference is more relevant to companies, it is accessi-ble to a broad range of stakeholders, and that high-level investors attend.

“The Minerals Council is highly supportive of this initiative, which is an excellent plat-form to provide exposure for emerging and junior miners. We are extremely pleased that minerals explorer Orion Minerals achieved second place in the Mining Investment Battlefield Competition for its Prieska zinc/copper project, in the Northern Cape.”

Moreover, Baxter notes that Mineral Resources Minister Gwede Mantashe recognised the contribution made by mining

to the economy and suggested that, within five years, mining could contribute 10% to the gross domestic product if certain pre-conditions are achieved including ethical leadership and good governance; policy and regulatory certainty and competitiveness; available, efficient, cost competitive and reli-able infrastructure; improving productivity and competitiveness; and creating a “green-field exploration boom”.

The Minerals Council estimates that, in 2018, the mining industry employed 453 543 employees who supported about 4.5-million dependants. He mentions that one of the big-gest changes the industry has seen in the past year has been the extent of real engagement between business and government.

“There have been a number of useful engagements between business, President Cyril Ramaphosa and Mantashe. The indus-try has a Minister who is willing to engage and listen, not only over broad policy issues but also the detail of what different min-ing sectors need to develop and grow. That does not mean that we agree on everything, but being able to engage is a very important starting point.”

Baxter highlights that this vision must be tangible and has to outline realistic steps with clearly defined roles for all stakeholders. “Through strong leadership partnerships and

proper strategic plans, we can enable the South African mining sector to realise its true economic and transformational potential.”

He further comments on the importance of policy certainty, as it can lead to improved competitiveness, but only if that policy is in itself competitive. In this regard, the Mining Charter has been a major issue over the past few years.

“The Minerals Council, and most of the industry, consider most aspects of the charter published in September 2018 to be a frame-work with which we can live. Naturally, there are several aspects in respect of which a dif-ferent outcome would have been preferred, but the Minerals Council also accepts that the Minister and his department had many different interests to accommodate,” says Baxter.

Meanwhile, he comments that the Minerals Council is pleased with the recognition in the application of the Mining Charter that spe-cial conditions should apply to junior and emerging miners.

Addressing constraints on exploration in South Africa is something that the Minerals Council is passionate about and is an impor-tant area of focus for its Junior and Emerging Miner’s Desk.

The Minerals Council is also pleased that exploration projects need not adhere to simi-lar charter requirements that major compa-nies have to, Baxter adds.

“This removal of disincentives for projects that do not generate revenues is a short-term welcome. What is needed further is an envi-ronment that actively encourages exploration and welcomes the risk-takers and mavericks who have the vision and courage to seek and discover new deposits, big and small,” he concludes. How do you get two whales in a car? Start in

England and drive west.

22 MINING WEEKLY | March 1–7, 2019 AN

MINING INDABA REVIEW

Indaba created positive platform – Baxter

MINING WEEKLY COUPON ON PAGE 13 E511672

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AN MINING WEEKLY | March 1–7, 2019 23

MINING INDABA REVIEW

Although the mining industry has not appealed to many

young people for quite a while, this is starting to change through initiatives such as the Young Leaders Career Development Programme, says nonprofit organisation Learn and Give Education Foundation (LGEF) cofounder and chairperson Teboho Maphakisa.

LGEF – an official partner of the 2019 Investing in African Mining Indaba’s Young Leaders Career Development Programme, which was held in Cape Town last month – was responsible for promoting and marketing the programme to prospective participants through online campaigns and print material.

“Participants included university students and recent graduates, not only in traditional mining career fields but across the whole value chain,” he says, adding that participation in this year’s programme had increased.

This year, the organisers of the Indaba also launched the Leaders of Tomorrow Competition, where young people were invited to submit innovative proposals in the fields of safety, water, exploration and mineral recovery. This strategy also

roused significant interest from young people, says Maphakisa.

“It is not every day that you get direct access to the C-Level executives, entrepreneurs and human resource practitioners from various companies all in one room. As an organisation, we always try to establish partnerships for the benefit of the youth in our country, particularly the previously marginalised.”

Young Leaders Career Development ProgrammeMoreover, Maphakisa – a former participant of the programme – believes that the main benefit of attending the programme is the opportunity to listen to the industry captains and, most importantly, to build relationships. It is also a platform that affords the youth who are interested in a career in mining a chance to meet with and learn from a variety of other top executives representing some of the world’s most successful mining companies.

LGEF is grateful for having been entrusted with the responsibility of marketing and promoting the Young Leaders Programme. The organisation believes that future workplaces will need adaptable and flexible critical thinkers, and it is through such programmes that future industry captains are created.

Foundation driving youth participation in mining industry

Grow though what you go through.

MINING WEEKLY COUPON ON PAGE 13 E511486

MAMAILI MAMAILA | CREAMER MEDIA REPORTER

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WorleyParsons adds value through our full scope of services from pit to port including studies, mine planning, impact assessments, permitting and approvals, project management, construction management and global procurement.

Our Mining Centre of Excellence in Johannesburg has niche expertise in underground and open cast mining and provides quality project development and engineering solutions for small to large projects across all areas of base metals, the coal supply chain, chemicals, ferrous metals, alumina, aluminium and iron ore.

Supported by the WorleyParsons global group, we pride ourselves on customising solutions for local environments and committing to our customers’ goals.

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Mining ServicesUnderground Mining Services.Open cast Mining Services. Civil Services.

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Established in 2011, Modi Mining has grown an average of 30% a year, earning founding owners and husband and wife team Motlapele Molefi and Sam Molefi the 2019 Sanlam and Business Partners Entrepreneur of the Year award winner.

The 100% black-owned company was established to offer contract mining services, supplies and environmental solutions to the mining industry.

Modi Mining aims to facilitate responsible, cost-effective and efficient mining activities by leveraging a range of capabilities, including:• Underground Mining Services: contract mining (stoping, development and mechanised mining), sweepings and vamping, underground construction, haulage maintenance, blast consult services and reclamation and equipping.• Open cast Mining Services: top soi l str ipping, overburden stripping, coal ore mining, rehabilitation and dump mining and management. • Civil Services: waste ore handling and dump site management, ore transportation, screening and crushing, earthworks and rubble removal.

With its head of f ice in Rustenburg and branches in Klerksdorp and Middelburg, Modi Mining has grown to become a reputable supplier of materials and consumables for mining operations across commodities. In line with its commitment to environmental responsibility, most of the company’s products are produced from recycled material • Mining Supplies: include blasting barricades, Low-density polyethylene (LDPE) pipes, hopper coupling pins, spinning adaptors, water drain segments, pinch bar guards, LDPE ladder steps, ventilation pipes and mining tools and hardware.• Environmental Services: In partnership with Cypher Environmental, Modi Mining supplies a range of exclusive market-leading environmental solutions for the mining, construction, agriculture and public sectors.

Modi Mining’s pledge of “performing for impact” underlies its continued commitment to safety, quality, cost effectiveness and client satisfaction.

MODI Mining

An Astec Industries Companysince 1919

OSBORNCOMPANYPROFILE

South African mining and quarrying equipment specia l ist Osborn is ce lebrat ing i ts 100th anniversary.

Since its foundation in 1919, the company has grown and evolved. Today, Osborn is recognised as a leading name in global mining and quarry markets and one of South Africa’s foremost manufacturers of equipment for these industries. Osborn offers a full range of engineering products, including crushers, feeders and screens, as well as crushing and screening plants. Osborn’s experience and expertise encompasses the full manufacturing process, from concept and installation through to commissioning.

Osborn’s unrivalled machines have made their mark around the world, operating successfully in the most arduous conditions. This global success and a century in business can be credited to Osborn’s consistent focus on quality, innovation and relationships – and to the support of valued customers.

Attention to detail and commitment to meeting customers’ needs, together with a long-standing

reputation for hard wearing, high-quality machines, safety and service excellence, is what sets Osborn apart.

Over a century in business, Osborn has forged rock-solid relationships with satisfied customers around the world. Osborn’s reputation for tough, reliable and well supported products has been the driver behind an ever-expanding global footprint.

As a global, world-class business, Osborn is uncompromising when it comes to the safety of employees and customers, and is committed to sustainable, environmental ly conscious business practices. The company operates in strict accordance with national and international standards, and is proudly ISO 9001: 2008 certified.

A commitment to innovation and continuous improvement is an integral part of Osborn’s customercentric approach. New technology and industry developments are constantly leveraged to enhance Osborn’s equipment and service offering. Osborn doesn’t just deliver machines. The company embraces innovation to deliver productivity.

Meeting the specific needs of each customer is an Osborn priority. Whether delivering a bespoke solution or a standard Osborn machine, Osborn aims to ensure that customers’ expectations are met on time, every time.

For customers, purchasing equipment from Osborn is only the start of a long-term relationship. Osborn’s on-call spares and service department operates 24/7. The company’s field service includes site and machine evaluations as well as on-site training for customers’ staff. Qualified Osborn field service personnel ensure global coverage.

Osborn is a member of the US-based industrial group Astec Industries. This valuable connection delivers exceptional benefits to Osborn customers as it augments the company’s internal resources with the Astec Group’s extensive technologies, equipment, research and development, enabling international knowledge sharing and the transfer of skills.Contact: Tel: 011 820 7600www.osborn.co.za

OSBORN celebrates 100 years of quality, innovation and service excellence

LO MINING WEEKLY | March 1–7, 2019 25

©C

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Tel: +27 (0)14 592 1560 Email: info@modimining.co.za Web: www.modimining.co.za

Mining ServicesUnderground Mining Services.Open cast Mining Services. Civil Services.

Environmental SolutionsSoil Stabilisation, Dust Control and WaterTreatment Solutions

Mining SuppliesManufacture and Supply of Blasting Barricades and LDPE Pipes. Supply of Mining Tools, Hardware and Consumables.

COMPANYPROFILE

Established in 2011, Modi Mining has grown an average of 30% a year, earning founding owners and husband and wife team Motlapele Molefi and Sam Molefi the 2019 Sanlam and Business Partners Entrepreneur of the Year award winner.

The 100% black-owned company was established to offer contract mining services, supplies and environmental solutions to the mining industry.

Modi Mining aims to facilitate responsible, cost-effective and efficient mining activities by leveraging a range of capabilities, including:• Underground Mining Services: contract mining (stoping, development and mechanised mining), sweepings and vamping, underground construction, haulage maintenance, blast consult services and reclamation and equipping.• Open cast Mining Services: top soi l str ipping, overburden stripping, coal ore mining, rehabilitation and dump mining and management. • Civil Services: waste ore handling and dump site management, ore transportation, screening and crushing, earthworks and rubble removal.

With its head of f ice in Rustenburg and branches in Klerksdorp and Middelburg, Modi Mining has grown to become a reputable supplier of materials and consumables for mining operations across commodities. In line with its commitment to environmental responsibility, most of the company’s products are produced from recycled material • Mining Supplies: include blasting barricades, Low-density polyethylene (LDPE) pipes, hopper coupling pins, spinning adaptors, water drain segments, pinch bar guards, LDPE ladder steps, ventilation pipes and mining tools and hardware.• Environmental Services: In partnership with Cypher Environmental, Modi Mining supplies a range of exclusive market-leading environmental solutions for the mining, construction, agriculture and public sectors.

Modi Mining’s pledge of “performing for impact” underlies its continued commitment to safety, quality, cost effectiveness and client satisfaction.

MODI Mining

An Astec Industries Companysince 1919

OSBORNCOMPANYPROFILE

South African mining and quarrying equipment specia l ist Osborn is ce lebrat ing i ts 100th anniversary.

Since its foundation in 1919, the company has grown and evolved. Today, Osborn is recognised as a leading name in global mining and quarry markets and one of South Africa’s foremost manufacturers of equipment for these industries. Osborn offers a full range of engineering products, including crushers, feeders and screens, as well as crushing and screening plants. Osborn’s experience and expertise encompasses the full manufacturing process, from concept and installation through to commissioning.

Osborn’s unrivalled machines have made their mark around the world, operating successfully in the most arduous conditions. This global success and a century in business can be credited to Osborn’s consistent focus on quality, innovation and relationships – and to the support of valued customers.

Attention to detail and commitment to meeting customers’ needs, together with a long-standing

reputation for hard wearing, high-quality machines, safety and service excellence, is what sets Osborn apart.

Over a century in business, Osborn has forged rock-solid relationships with satisfied customers around the world. Osborn’s reputation for tough, reliable and well supported products has been the driver behind an ever-expanding global footprint.

As a global, world-class business, Osborn is uncompromising when it comes to the safety of employees and customers, and is committed to sustainable, environmental ly conscious business practices. The company operates in strict accordance with national and international standards, and is proudly ISO 9001: 2008 certified.

A commitment to innovation and continuous improvement is an integral part of Osborn’s customercentric approach. New technology and industry developments are constantly leveraged to enhance Osborn’s equipment and service offering. Osborn doesn’t just deliver machines. The company embraces innovation to deliver productivity.

Meeting the specific needs of each customer is an Osborn priority. Whether delivering a bespoke solution or a standard Osborn machine, Osborn aims to ensure that customers’ expectations are met on time, every time.

For customers, purchasing equipment from Osborn is only the start of a long-term relationship. Osborn’s on-call spares and service department operates 24/7. The company’s field service includes site and machine evaluations as well as on-site training for customers’ staff. Qualified Osborn field service personnel ensure global coverage.

Osborn is a member of the US-based industrial group Astec Industries. This valuable connection delivers exceptional benefits to Osborn customers as it augments the company’s internal resources with the Astec Group’s extensive technologies, equipment, research and development, enabling international knowledge sharing and the transfer of skills.Contact: Tel: 011 820 7600www.osborn.co.za

OSBORN celebrates 100 years of quality, innovation and service excellence

Based on yearly auction sales, mines have proven to be motivated and realistic sellers, where there are

bargains for buyers who are willing to put a little effort into fixing something that they have bought at an auction, says auction house Aucor Auctioneers mining expert Charles Neser.

“There is a huge number of suppliers that supply goods to the mines – the suppliers attend auctions to buy second- hand items, refurbish them and resell them to mines.”

Mines sell big yellow equipment, dump trucks and excavators, which can be bought second-hand from another mining house on auction.

At these auctions, mines sell sought-

after goods, such as scrap metal, bakkies and construction equipment, Neser adds.

He explains that redundancy is the first reason why mines auction off their equipment – assets become redundant because mines change their production processes and their safety standards no longer allow them to use those assets anymore. Such assets may also have reached the end of their life span and have to be replaced.

Neser mentions that, in some instances, it may not be a mine’s priority to sell its assets to make a profit from the sale, as it would prefer offering its staff first option on buying the equipment through in-house sales and auctions. Aucor

Auctioneers also offers in-house auctions of bank repo vehicles, truck and construction, warehouse, catering, engineering and other loose assets, regional property auctions as well as national multiproperty auctions.

“It has become a trend in the mining industry that we need to offer a lot of the assets to the staff working at the mine first.

“Obviously, we facilitate those sales on behalf of the mine; however, the challenge we face is having to meet all the expectations of all the different parties involved in this type of sale.”

Neser says owing to the strict health and safety requirements adhered to by

26 MINING WEEKLY | March 1–7, 2019 LO

SPECIAL FOCUS MINING AUCTIONS

Compiled by KHUTSO MAPHATSOE

Mines can save equipment costs through auctions

• To page 28

EQUIPMENT ON SALEMines can purchase second-hand equipment, trucks and excavators on auction from other mining houses

KHUTSO MAPHATSOE | CREAMER MEDIA REPORTER

Terms and conditions available on our website. Refundable

registration fee and FICA documentation required to participate. AUCTIONEER:

GoIndustry DoveBid S.A. (Pty) Ltd.

0861 GODOVE (463683)

sa.sales@go-dove.com

www.go-dove.com/southafrica

@GoDoveSA

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6 MAR 7 MAR

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OUR RECENT AUCTIONS

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all mines, it is not always possible for prospective auction bidders to gain access to the various mine sites in order to inspect the assets earmarked for disposal, by the same token once an auction has been concluded, the successful

auction bidder may find it difficult to operate, load and/or remove newly bought assets from the mine. Although this may be a challenge, Aucor, though its years of industry-specific experience, manages expectations of both the buyer and the seller while comfortably

operating within the prescribed parameters.

Auction houses need to be completely transparent when conducting auctions to ensure that all sales are fair to both the clients and the buyers.

More mining companies are seeing the benefits of selling their assets using an online process, says

auction house GoIndustry Dovebid associate director John Taylor.

The selling of assets can be done through an online auction, a sealed bid or a private treaty event. GoIndustry Dovebid offers a large suite of services, which includes asset disposal and management, valuations as well as waste and scrap facilities management. This holistic approach to all asset and waste management is completely transparent

and auditable which is proving a major success with various mining houses in Southern Africa.

He explains that an online auction is a transparent sales platform that is more cost effective for the seller, as it allows for assets to remain at various locations without the need for costly transport and labour to move them to a centralised auction yard.

Taylor adds that it is also convenient for clients as they can bid from the comfort of their business premises, saving them time and money.

“As all bids placed during the auction are date-stamped and recorded on our servers, we have the ability to draw on reporting immediately or many years later. It also enables us to record and

track bid history and asset pricing, therefore maintaining and tracking market trends in asset prices.

Although online auctions are a viable option for the mining industry, mining companies need to do their own due diligence regarding their asset disposal partner – one “that provides the most transparent and auditable process and that can back up their ‘sales pitch’ with proven results”, he mentions.

Although Goindustry Dovebid has achieved remarkable success in Southern Africa, the big differences in auction events in Africa as opposed to the rest of the world is that sellers in some of the larger economies allow for a longer marketing period, more marketing spend and the auctions generally have more lots.

Goindustry Dovebid SA has also developed its offering by “advising and managing due diligence processes when it comes to selling complete mining assets, whether it be a distressed sale situation or a corporate disposal”, he adds.

Taylor concludes that, with the company’s extensive experience and knowledge in the mining industry, the recording and database of asset sales, buyers and sellers, as well as its virtual data room to host due diligence information, GoIndustry Dovebid is at the forefront of providing mining houses with a complete asset disposal solution.

Online auctions an alternative option for mining companies

28 MINING WEEKLY | March 1–7, 2019 LO

MINING AUCTIONS

SELL ITOnline auctions allow assets to remain at various locations without needing costly transport or labour to move them to an auction yard

JOHN TAYLOROnline auctions enable mining companies to sell their assets without having to move to a centralised auction yard, saving on transport and labour costs

• From page 26

One of the most difficult things to give away is kindness – it is usually returned.

MINING WEEKLY COUPON ON PAGE 13 E511726

MINING WEEKLY COUPON ON PAGE 13 E511717

KHUTSO MAPHATSOE | CREAMER MEDIA REPORTER

Changes in auction rules with regard to mining have led to enhanced

par ticipation in the auction pro­cess and have provided a fillip for the auction process that has resulted in more mineral blocks being auctioned successfully, s ays auc t ion house R i ley Auctioneers director Kwanele Boltina. These rules are in line with the Consumer Protection Act, No 68 of 2008, that works in favour of both the buyer and sellers at auctions.

It is expected that the bigger effect of these changes will be felt in 2019 and 2020, with some of the auctions possibly spilling over from 2018 to 2019.

According to Boltina, mine

auctions meet its clients’ needs effectively. It needs an approach suited to the increasingly digi­tised world, as well as its global client base, and it helps support the ef f ic iency of sourcing activities. Mining auctions also offer opportunities to clients while providing a fair and com­petitive platform for sales. “Our cus tomers have access to bidding data throughout an auction so they don’t need to worry about the risk of over extending them­selves financially to secure a par­cel. Looking back over the past ten years, we can be very proud of our achievement,” he says.

He adds that the vast majority of producers, and even govern­ments, have adopted auctions

for at least a part of their overall sales mix. Items often sold by mining companies include titanium and stainless steel ball valves, low­pro file utility vehicles, stores and contents graders, as well as Toyota Land Cruisers and trans formers.

Boltina adds that the current economic climate has resulted in the wider prevalence of auctions across a spectrum of industries in the country, since auctions offer a quick turnaround for urgent sales, while buyers are increasingly on the lookout for bargains.

However, he mentions that there is a need for more repre­sentation of transformed and black­owned auction houses, such as Riley Auctioneers, to

“level the playing field”.“The auction industry is a very

monopolised space and, sadly, is still predominantly white­owned; however, with the current state of affairs and the new Mining Charter, we are hoping for a more transformed and competitive land scape in the near future, with equal and impartial involvement for all players,” he concludes.

Mining auction changes provide room for growth

RA MINING WEEKLY | March 1–7, 2019 29

MINING AUCTIONS

Call or visit our website for the latest auction catalogue

011 574 5700 • whauctions.comWH Auctioneers (Pty) Ltd - 578 16th Road, Randjespark, Midrand

Monthly Earthmoving Machinery Auction WH

Can’t make it to the sale? Bid online via Webcast.

Bank Repos, Liquidations, Company Closures & De-Fleet

KWANELE BOLTINAChanges in the auction rules in mining resulted in enhanced participation

KHUTSO MAPHATSOE | CREAMER MEDIA REPORTER

MINING WEEKLY COUPON ON PAGE 13 E511325

30 MINING WEEKLY | March 1–7, 2019 LO

MININGPERSONALITYFull Name: Nelson Tlhaloso ‘Tee’ NakediPosition: Exploration nanager, Gubhani ExplorationMain Activity of the Company: Exploration drillingDate and Place of Birth: May 24, 1979, SowetoEducation: MSc Eng (property development) (still to complete), University of the Witwatersrand (Wits); BSc (Hons) (geology), University of Johannesburg; BSc (mining and exploration geology), WitsFirst Job: Sasol MiningSize of First Pay Packet: About R12 000 a monthValue of Assets under Your Control: R15-millionNumber of People under Your Leadership: 11Management Style: Inclusive – everyone has to understand the plan and have a say; that is the only way the vision can be executedPersonal Best Achievement: Becoming a fatherPerson Who Has Had the Biggest Influence on Your Life: My brother, Vuyo NakediPerson Who Has Had the Biggest Influence on Your Career: John Sparrow – he recruited me straight from university and mentored me, and remains a voice of reason in my headPerson You Would Most Like to Meet: Pep Guardiola – former Barcelona, Bayern Munich and current Manchester City head coachBusinessperson Who Has Impressed You Most: My brother-in-law, Paki Matlolane. He has the ability to create something out of nothing and his negotiation skills are second to none. He is equally comfortable talking to Presidents or CEOs, or the ordinary personPhilosophy of Life: If you want to go fast, go alone; if you want to go far, go together – crime, jealousy and the like happen when people are left behind to struggleBiggest Ever Opportunity: Being an exchange student in South America many, many years ago. This showed me that the world is not just black and whiteBiggest Ever Disappointment: It is football related. My team, Kaizer Chiefs, has not won any silverware in the past three seasonsHope For the Future: I hope to build a school for orphaned childrenFavourite Reading: I am a gadget guy, so I read anything that is tech related, and my go-to source is the Flipboard app. My favourite book, however, is The Fountainhead, by Ayn Rand, and I have read the Bible from cover to cover – twiceFavourite TV Programme: At some point, it was the X-Files, then The Tomorrow People, and I have just discovered Black MirrorFavourite Food/Drink: iNkomasi and bread (absolutely no sugar)/sparkling water or Oros with ice on a hot summer dayFavourite Music: It depends on the moodFavourite Sport: I love to play basketball but have not watched a game in years. I also love watching soccer, but do not have the energy to playHobbies: I don’t hobby (sorry, private joke)Car: Whatever my wife is driving or is available on sitePets: NoneMiscellaneous Dislikes: Not having options and when people say “No” too quicklyMarried: To Lindi – we have been married for 13 yearsChildren: Gali, 11; Kelti, 8; Poh, 1Clubs: Geological Society of South Africa

Tlhaloso Nakedi

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Gubhani Exploration