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Copper and zinc mine development company Orion Minerals is well placed to take advantage of the projected copper shortfall in the second half of this decade with its portfolio of short lead-time, quality assets and exploration potential, S2Research analyst Simon Hudson-Peacock stated on Monday.

Globally, there are very few copper projects of similar quality that are as advanced along the value curve with secured funding, as is the ASX- and JSE-listed Orion, with its 750 000 t of declared compliant copper equivalent mineralisation, Hudson-Peacock pointed out in the October 6 analysis.

Hudson-Peacock's comments are contained in a 23-page valuation update, which quotes Glencore CEO Gary Nagle as telling Forbes magazine on October 20 that: "The world just doesn't get it. It doesn't understand that a massive copper deficit is coming." The world will stop without the additional copper supply but the price of copper is not reflecting it.

Orion's Prieska copper/zinc mine and its Okiep copper project are not far from entering the construction and implementation stage, which will open the way for South Africa to become a producer of two critical metals required for the global energy transition.

Also being developed by the company is the Jacomynspan nickel, copper and cobalt project, 70 km north of Prieska, in which it holds a 50% interest.

In March, Orion, headed by Boksburg-born CEO Errol Smart, announced a funding package that introduced Clover Alloys as a new key shareholder for Orion.

Clover Alloys is a privately owned South African mining group headed by South African mining stalwarts Philip Kotze and Adam Fleming. Fleming is the former chairperson of gold exploration and mining company Wits Gold and Kotze the former CEO of Wits Gold. (Interestingly, Mining Weekly can report that Ian Fleming, the author of the James Bond spy novels, was Adam Fleming's father's elder brother.)

At an upcoming annual general meeting (AGM) scheduled for November 28, shareholders not associated with Clover Alloys will be asked to approve the second tranche of a funding package that could take the Clover Alloy's stake in Orion from 9% to 25%, which is beyond the key shareholding threshold of 19.99% as defined by Australian Corporations Act.

This assumes that Clover Alloys chooses to follow all its rights and similarly assumes that all other shareholders exercise their options to participate.

On October 30, Orion published a financial services guide and independent expert's report to assist shareholders in their decision on how to vote at the AGM on the second tranche of Orion's strategic funding package, amid the report deeming the value of the offer as unfair to shareholders based on the dilutionary effect of the raise at an exercise price of A$1.7 cents a share (cps) that is below their assessed value of the company prior to the raise of A$2.3 cps.

However, the independent report also deems the offer as reasonable on account of the negative commercial implications of the raise on the advancement of Orion's project portfolio should Clover Alloys not be permitted to participate to the extent proposed.

S2Research, which has used the report to update its fair-market value for Orion considering the effects of the capital raise and referencing current market conditions, calculates the valuation per Orion share at current market commodity prices and exchange rates, to be R73 cps or A$6.1 cps, taking into account Jacomynspan, cash unallocated to the Prieska mine and the Okiep project and exploration potential.

S2 Research enhances the values of the exploration assets in Orion's portfolio by referencing copper mining peer Copper360, which listed on the JSE in April. It includes exploration potential at Prieska and presents an argument for a 10% resources enhancement, arguing that Prieska and Okiep can be valued using income-based discounted cash flow methods.

Prieska published a...

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South Africa has the skills to resolve the Transnet issue, says Vuslat Bayoglu, the MD of Menar, a private investment company with an actively managed and growing portfolio of mining assets currently including anthracite, coal and manganese in South Africa and gold and nickel outside of South Africa.

Speaking to Mining Weekly in a Zoom video interview, Bayoglu, described as helpful the discussions industry leaders are having with Transnet to try and resolve rail constraints.

"Transnet has not been able to solve its problems resulting in huge opportunity costs. But this downside has made stakeholders appreciate the importance of coal export revenues. The price levels are still way above the pre-Covid period, which testifies to coal's resilience," said Bayoglu. (Also watch attached Creamer Media video.)

"We know what the problems are and industry can provide help to Transnet. If Transnet performs, we can bring revenue into the country but if it carries on the way it did last year, then it's going to be very bad for the fiscus," said Bayoglu, whose attendance at the Kgalema Motlanthe Foundation event in Drakensberg over the weekend convinced him that Finance Minister Enoch Godongwana is very well informed about the devastating impact to the fiscus of a Transnet that is unable to secure revenues from the export of mined products, be they coal, iron-ore, manganese or chrome.

"Mining companies with significant export portfolios started off 2023 financially healthy because of the wins from 2022. Unfortunately, we cannot ignore the fact that prolonged rail constraints are starting to create setbacks.

"Ordinary people on the street will not feel the effects immediately but if we don't have enough foreign currency flowing into the country, we'll all start feeling the impact of Transnet not performing," Bayoglu pointed out.

"It's not about pointing fingers but the reality is that we have to make Transnet work, otherwise the mining industry, which is the backbone of this country's economy, will be failed," he emphasised.

Meanwhile, with its own expansion projects yielding positive results, Bayoglu reported 2023 as being a good year for Menar, which undertook the mammoth task of progressing the development of Gugulethu Colliery from an idea on paper to being a functioning site on which the first coal is expected to be exposed by the end of this month.

Moreover, it is commissioning the processing plant to make sure that clean coal is produced.

Being constructed on the busy project site are pollution control dams and roads. "Hopefully, we'll start processing first coal by the end of January next year," said Bayoglu.

Every effort will be made to save water at Gugulethu, which has a 400 t/h plant with a 28 t/h filter press onsite. Targeted is the mining of 200 000 t of coal a month by January, with the first washed coal by February amid the building of good relationships with surrounding farmers and the community.

In addition to Gugulethu, Thuso, also in Mpumalanga, was announced as part of Menar's R1.4-billion investment pledge at the South Africa Investment Conference led by President Cyril Ramaphosa, with the development of Thuso expected to begin in 2024.

The revived and now producing Maye B decline at Zululand Anthracite Colliery (ZAC) has been re-equipped into two sections.

Furthermore, Mngeni, ZAC's newest shaft will hopefully be completed this year after rain prevented its targeted completion at the end of October.

At Kangra colliery, good production levels are being seen with the mining of the Kusipongo reserve owing to the recently developed Udumo and Belgarthen Adits.

In addition, the flagship Bekezela project in Springs, Gauteng could be issued its water use license (WUL) before the end of this year, opening the way for the employment of 800 people along with major procurement, bursaries, learnerships, internships and local economic development proj...

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With the global macroeconomic environment remaining challenging, Sibanye-Stillwater is continuing to assess the positioning of its operations for optimal performance and sustainability through the cycle, CEO Neal Froneman said on Thursday when the company provided a third-quarter operational update.

"Our financial position remains robust and our capital allocation framework remains the guiding principle for growth and diversification opportunities aligned with our strategy," Froneman highlighted.

"We have maintained our capital discipline in anticipation of weaker market conditions, as highlighted in February 2022. We remain prudent with capital investment and utilising our balance sheet to fund external growth during this challenging period.

"We are conscious of the necessity of appropriately managing debt, mindful of our leverage position during periods of decreasing, or volatile, profitability and earnings," Froneman added in a release to Mining Weekly.

After a difficult start to the third quarter, with three tragic fatalities recorded in the first five weeks, the remainder of the three months to the end of September was fatality-free.

Noted was that the gains in safety performance indicators since 2021 had been maintained, with the other lagging indicators generally stable year-on-year.

The platinum group metals (PGMs), gold and green metals company is looking forward to ongoing safety improvements over the remainder of the year, with an intense focus on ending the year without any high-impact incidents.

Sibanye reiterated its mindfulness of the commercial environment as well as its intention, where necessary, to consider restructuring in areas where commercially viable operations cannot be sustained.

In this regard, potential restructuring at the South African gold and the South African PGM operations was announced.

"Potential closure or rightsizing of high-cost and underperforming shafts will ensure that operations remain profitable and sustainable at current precious metal prices and beyond, while retaining significant leverage to improvements in the commodity price outlook," said Froneman.

Although the US PGM operations were repositioned in mid-2022 in anticipation of the changing macro environment and worsening medium-term outlook for the palladium price, the decline in the palladium price during 2023 has surpassed expectations, dropping lower and faster than anticipated.

While the mine production volume run rate at the US PGM operations improved during October, persistent inflation and the continued impact of skills shortages, have resulted in costs remaining significantly higher than planned. Further repositioning is being considered to address these factors which have kept costs at elevated levels.

As guided, the third-quarter operational performances of the Sandouville nickel refinery in France and the Century zinc retreatment operation in Australia improved, with both operations recovering from first-half disruptions. This improved operational performance resulted in the Century operation contributing positively to third-quarter group adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda), a turnaround from adjusted Ebitda losses in the second quarter.

But despite the improved third-quarter operational performance, the Sandouville refinery remained loss-making, owing to continued inflationary cost pressures, elevated maintenance costs and a further decline in the average nickel price.

The current operations are not commercially viable at current nickel prices, and management has made notable progress with optimisation studies aimed at securing a sustainable future for the Sandouville refinery.

"Positively, during these optimisation studies, the European region and Sandouville teams have identified an innovative alternative to the current process and are currently assessing its commercial and technical fea...

Mining Weekly Editor Martin Creamer discusses Orion’s progress towards operational commencement at Prieska, in the Northern Cape; the $90-million joint venture deal between Arc Minerals and Anglo American; and Anglo American's view of Finland as a site for its next greenfield project.

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Work has begun on the development of a hydrogen plant at the smelting site in Rustenburg of Ironveld, the London Aim-listed speciality metals producer.

The required funds have been raised to proceed with the manufacture and installation of a commercial demonstration plant that will produce hydrogen from compressed natural gas for green steel reforming at the smelter, BurnStar Technologies stated in a media release on November 1.

Full operational readiness of the five kilograms an hour turquoise hydrogen plant is anticipated by the end of the first quarter of next year.

BurnStar intends using the Ironveld demonstration as a springboard into the commercial clean hydrogen supply market.

"We've already started on development of a five ton per day unit and will soon be able to incorporate the learnings from commencing this first commercial operation early next year," BurnStar CEO Dr Johan Brand highlighted.

This follows Mining Weekly reporting in April that Ironveld Energy had signed a hydrogen agreement with BurnStar to facilitate the production of green metals in South Africa.

Ironveld's smelting division processes the group's magnetite ore into high-purity iron, vanadium slag and titanium slag.

Backed by South African venture capital and incubator fund Savant, BurnStar has reached agreement with engineering, procurement and construction (EPC) solutions provider Turnkey Modular for the EPC of the first commercial Guilt-Free HydrogenTM catalytic molten metal reforming plant. Funding from Johannesburg- and New York-listed platinum group metals and gold mining company Sibanye-Stillwater has also been secured, the release stated.

"This process uses eight times less energy than electrolysis and only 4 kg of methane is required to produce 1 kg of hydrogen," said Brand.

Once the BurnStar plant begins producing, Ironveld plans to evaluate hydrogen's use as a green reducing agent in the Rustenburg smelter's high-purity steel production process.

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Platinum group metals (PGM) mining and marketing company Implats is implementing a comprehensive operational and expenditure response to mitigate the current weakness in PGMs pricing and the resultant pressure on margins.

"It's imperative that all our operations are set up to contribute sustainably and profitably through the vagaries of PGM cycles," Implats CEO Nico Muller stated in the JSE-listed company's first quarter production report for the period of July 1 to September 30.

"Capital expenditure on projects considered key to strategic delivery will continue, but planned elevated levels of spend across the portfolio will be adjusted to reflect the prevailing current reality of compressed industry margins," Muller stated in the release to Mining Weekly.

Total six element (6E) group production volumes increased by 21% from the previous comparable quarter to one-million ounces, with a 34% increase in managed volumes to 799 000 oz, stable production of 141 000 oz from joint ventures, and a 31% decrease in third-party receipts to 62 000 oz.

While production metrics benefitted from the maiden inclusion of Impala Bafokeng in the period, notable improvements were achieved on a like-for-like basis at the group's mining and processing operations.

Gross 6E refined and saleable production volumes increased by 25% to 885 000 oz and 6E sales volumes increased by 17% to 829 000 oz.

"The strong operational delivery in the period is a testament to the flexibility and resilience our people enabled at our operations - with targeted investments in asset integrity and projects focused on harnessing the inherent competitiveness of our mining and processing portfolio yielding notable improvements.

"Volume gains offset persistent industry-wide inflationary pressures and the operational impact of load curtailment was also minimised in the period. The integration of Impala Bafokeng gained momentum and focused efforts to improve and embed our safety performance remain a key focus," said Muller.

Regrettably, Marula and Impala Bafokeng operations each reported a fatality in the period amid 16% year-on-year improvement in the lost-time injury frequency rate and an 11% improvement in the all-injury injury frequency rate.

"Recent discussions with our core customer base confirm our underlying view of rising demand for our key products over the coming year. Residual customer caution reflects the persistent global macro-economic uncertainty and notable trade-flow shifts in primary mined supplies, resulting in adjustments to market liquidity and pricing," Muller added.

PRODUCTION

Gross tonnes milled at managed operations increased by 29% to 7.55-million tonnes during the quarter, augmented by the maiden inclusion of Impala Bafokeng, with 9% gains on a like-for-like basis. Milled grade increased by 4% to 3.77 g/t and 6E concentrate production at managed operations increased by 34% to 799 000 oz, with a like-for-like improvement of 12% from the collective production base at Impala Rustenburg, Marula, Zimplats and Impala Canada. Concentrate production from the joint ventures (JVs) at Mimosa and Two Rivers was stable at 141 000 oz.

Third-party 6E concentrate deliveries to Impala Refining Service declined by 31% to 62 000 oz reflecting the conclusion of two contracts in the third quarter of the previous financial year.

Consequently, group 6E gross production volumes increased by 21% to one-million ounces, 5% higher on a like-for-like basis.

Refined 6E production, which includes saleable ounces from Impala Canada and Impala Bafokeng, increased by 25% to 885 000 oz.

Production at Impala Rustenburg benefitted from previous investment in asset integrity and operational flexibility, specific internal interventions, and fewer external interruptions.

Impala Bafokeng's BRPM operations delivered to plan in the quarter, but performance at Styldrift was negatively impacted by a lengthy Secti...

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Full-year 2023 production guidance of London- and Johannesburg-listed diversified mining and marketing company Glencore remains largely in line with previous guidance.

An exception is nickel, guidance for which has been reduced to reflect maintenance outages at the Sudbury smelter in Canada and a longer than expected recovery from 2022 strike action at Raglan in Canada, together with a lower full-year revision for Koniambo Nickel mine in New Caledonia.

Own sourced nickel production of 68 400 t was a 16% lower 13 200 t than in the first nine months of last year, primarily reflecting higher third-party production versus own-sourced, in large part necessitated by the strike at Raglan mine in 2022.

Ferrochrome production of 873 000 t was a 21% lower 237 000 t owing to additional smelter off-line days during the three-month high electricity demand winter season, a period of elevated power prices, as well as load curtailments in South Africa. Chrome ore mining production is expected to be only modestly below 2022 levels, however.

Over the first nine months of the year, production performance from the company's underlying base business was described by Glencore CEO Gary Nagle as being solid, with key copper, coal and zinc assets performing in line with expectations and previously communicated guidance.

In the marketing segment, Glencore continues to expect adjusted earnings before interest and tax to be above the top end of its yearly $2.2-billion to $3.2-billion long-term guidance range. A likely outcome, the company stated, is within the previously communicated $3.5-billion to $4-billion range.

Own sourced copper production of 735 800 t was 5% lower than the comparable 2022 period on the sale of Cobar in June and lower copper by-product production outside the copper department.

Also in line with the first nine months of last year was own sourced cobalt production of 32 500 t.

Own sourced zinc production of 672 100 t was 4% lower than the comparable 2022 period, reflecting mainly the disposals of South American zinc operations and the closure of the Matagami operation in Canada, offset by stronger production from Kazzinc (Zhairem) in Kazakhstan, and Antamina in Peru.

Coal production of 83.9-million tonnes was broadly in line with the comparable 2022 period. South African thermal coal production of 13.3-million tonnes was 5% higher on improved productivity.

Changes in guidance mainly reflect nickel being down 9% and ferrochrome being down 8%.

The emphasis that Glencore is placing on the circular economy was highlighted again at last month's FT Mining Summit in London, amid Glencore taking several steps along the busying material recovery road through the establishment of localised circular supply chain partnerships to increase material availability in a world where environmental protection is becoming paramount.

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Sakatti, with its metal concentrations of platinum group metals (PGMs), copper, nickel, cobalt, and others, may be the site of the next greenfield project of diversified Johannesburg- and London-listed mining company Anglo American.

Located in central Lapland in Finland, Sakatti's polymetallic orebody is aligned to the critical minerals priorities of Finland and the European Union (EU). (Also watch attached Creamer Media video.)

Sakatti is set to be a remotely operated, low-carbon underground mine with an electric mining fleet.

No reference was made to whether or not that electric mining fleet will be of the battery electric vehicle variety, generally used in underground environments, or the Anglo-developed green hydrogen electrified kind, which is being advanced at the opencast Mogalakwena PGMs operation in South Africa.

But already stated is that it will use technology and mining methods that create zero waste and enable high degrees of water recycling, an approach which underpinned the environmental impact assessment (EIA).

Moreover, in developing Sakatti, Anglo intends building on what it has learnt from its development of the Quellaveco copper mine in Peru as well as what it is learning at its current Woodsmith crop nutrients project in the UK - particularly in terms of minimal surface footprint and using technology and innovation to deliver even better sustainability outcomes.

In the words of Anglo Crop Nutrients CEO Tom McCulley, that means being "out of sight, safe, reliable, and catering to our customers and society's needs".

"I've just come back from Sakatti. It's in a remote part of the world. It's designed as the next generation of Future Smart mining… contributing to a sustainable supply of critical minerals to support the energy transition in Finland and the EU," Anglo projects and development director Alison Atkinson told this week's sustainability performance update, covered by Mining Weekly.

The reference to remote operation implies personnel sitting on surface and directing peopleless operations underground.

"I'm pleased to say that the relevant authorities in Finland have approved the EIA. This is a fantastic achievement and a major milestone for the project, reflecting the true collaboration of all involved.

"We will continue to drill over the season to refine the modern approach we must and will take in developing this mine," said Atkinson.

"We will take our time on this early-stage development. Detailed study, not only of the mine itself, but in its implementation and operations will be critical to delivery. After all, it's the upfront detailed development that sets the foundation of this asset for decades to come.

"We will also continue to build the project delivery capabilities as the rigour and discipline in executing a high confidence plan well is as fundamental as the support of the stakeholders and neighbours, in addition to those skilled partners we will work with, to construct and implement our plans.

"Great projects are done brilliantly when that is in place alongside mature design and robust plan.

"We're replicating, continually learning, and approving our approach as we go and putting it into practice at scale across the other parts of the portfolio.

"We believe this is a competitive advantage for us and a fundamental part of our journey to sustainable mining. Delivering on our ambition is crucial as we have to produce the metals and minerals needed for the energy transition and the ongoing economic development in a responsible way, because that is the only way," Atkinson emphasised.

Mining Weekly Editor Martin Creamer unpacks Anglo American’s transition to 100% renewables in South America; South32's plan to deploy energy efficient technology at Hillside Aluminum in South Africa; and the H2.SA project which aims to promote a Green Hydrogen Economy in South Africa.

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The long-term energy transition solutions on which South32 is focused are renewable energy and electrification.

The Sydney-, Johannesburg- and London-listed diversified mining company has transitioned to 100% renewable electricity supply at Sierra Gorda copper mine in Chile and is deploying AP3XLE energy efficiency technology at Hillside Aluminium in South Africa to deliver near-term reduction in greenhouse gas (GHG) emissions.

"As part of our transition away from carbon-intensive energy, we remain mindful of the need to support a fair and just transition for the smelter's workforce, local communities, and the broader South African economy," South32 CEO Graham Kerr told Thursday's annual general meeting (AGM) covered by Mining Weekly.

Hillside plays an important role in South Africa, directly and indirectly supporting more than 31 000 jobs and contributing R9.9-billion to South Africa's gross domestic product.

Hillside's longer-term decarbonisation is tied to the transition to a lower-carbon energy source "and there is no doubt that this represents a challenge, particularly when it comes to developing large-scale renewable and low-carbon energy sources in South Africa", Kerr stated in his address to the AGM.

Hillside is continuing to investigate a range of potential solutions including acquiring nuclear energy attributes to reduce Hillside's emission intensity in the near term.

"We have signed a non-binding memorandum of understanding with Eskom to explore the potential to enter into a pilot agreement to purchase energy attributes associated with electricity generated at Eskom's Koeberg nuclear power station," said Kerr.

Operations that account for the majority of South32's GHG emissions are largely aluminium-related, taking in Hillside, Mozal in Mozambique, and Worseley in Australia.

Hillside's relationship with Eskom is described as being very strong. "The teams of Hillside and Eskom have an amazing level of cooperation and communication from both sides. We have a bit of time to get the nuclear piece right around carbon border adjustment mechanism (CBAM), but we don't see that as decarbonisation but rather keeping access to a market and as a very early interim step to longer-term pushing to renewables."

The memorandum of understanding with Eskom centres on allowing Hillside to maintain aluminium supply to Europe, particularly in the light of the CBAM coming into place.

"We see that as protecting the smelter while we work with Eskom and other counter parties to build out renewables that ultimately will replace the coal-fired power generation stations in South Africa.

"We've got some time to do this. There are some short-term imperatives around maintaining the access to European market with CBAM.

"We're very conscious about transitioning in a way that involves us engaging heavily with the government at national level but also at provincial KwaZulu-Natal level and employee level. This is a medium- to long-term fix which requires us to push in the right direction," said Kerr.

Meanwhile, roll-out of the AP3XLE energy efficiency programme is allowing Hillside to advance towards producing the same amount of product but with less electricity.

"We're in the process at the moment of going out to renewables quotes to see how that is developing into the marketplace, with the timeframe again being longer term."

About 50% of South32's book is exposed to the aluminium value chain, for which demand has not been as strong as hoped coming out of Covid.

Regarding the aluminium price continuing to be low, Kerr said: "While it's a bit depressed at the moment, in the long term we see positivity in the aluminium industry."