Newly appointed AECI Mining CEO Mark Kathan (51) says his main focus over the medium term will be the greening of the company’s manufacturing and logistical footprint, while also growing the firm’s presence in the rest of the world.

Kathan, the former AECI CFO, put up his hand for the top job at the mining and chemicals business when Edwin Ludick retired last year.

“Going forward I want to really drive environmental, social and governance (ESG) matters within the company. We have to adopt sound ESG principles, live them and make sure they become part of our DNA,” says Kathan.

“Ammonia comes from a carbon source, so for us the emphasis is on finding the right partner that can help us source and/or produce green hydrogen or green ammonia. That will be a key focus for us in the next few years.

“At the moment these products also carry quite a high cost, which means that we’ll need a strong focus on research to make them more cost-effective.”

Kathan says another key focus will be the carbon footprint of AECI Mining’s existing products, and to find ways to steadily evolve them into cleaner products.

“The next part for me is really about growth,” notes Kathan.

“Edwin has done an excellent job in consolidating the mining business, but now we have to see how we can grow it – and this isn’t just a South Africa or African story, it’s about how we take the business outside the continent.

“AECI Mining has some tentacles outside Africa, but it is about solidifying those tentacles in both the explosive and mining chemicals businesses.”

Kathan says the focus will be on markets where there is high growth in the mining sector.

This translates into expanding the existing successful business in Australia, and looking at new growth opportunities in South America.

“We have an investment in South America, which we acquired a few years ago, but we want to expand this, especially in Brazil,” says Kathan.

He adds that AECI Mining will also enter the Chilean market, with a plant to be set up there to support the South American market.

“The North American market is also very attractive and we will be keeping a close eye on developments and mining activity in that area.”

Despite all of these expansion ambitions, Kathan notes that AECI Mining’s growth depends – to a degree – on the growth of its customers.

“In South Africa the prospect for growth sadly doesn’t look that positive as mining volumes are currently constricted by a number of logistical issues.”

While AECI Mining has been able to work around the current global supply chain challenges, the company, its suppliers and its mining customers have been battling insufficient rail capacity and load-shedding in the domestic market.

“Also, the current global commodity super cycle is being driven by pricing, rather than volumes. But, that said, we are ready to ratchet up volumes along with our customers,” adds Kathan.

In an effort to counter Eskom’s rolling blackouts, Kathan says the AECI group will set up an initial solar farm at its Sasolburg mining chemicals site that will go live in the fourth quarter of the year. Another solar installation at the Modderfontein site will become active early next year.

Highest and best use of ultra-large end-of-life mine truck tyres are being brought about by a change to the model in which resources are mined, made into products, and then become waste.

Just one of these giant tyres can weigh 4.5 t and stand 14 feet tall. Put five of the 63-inch variety into a thermal conversion plant, as is being done in Chile, and, gosh, out will come almost 2 000 litres of oil, something like 4 000 kg of high-tensile steel, of the order of 8 000 kg of carbon black – plus enough synthetic gas to fuel the plant doing the job for hours on end.

The thermal conversion recycling method being deployed uses heat and friction to induce a reaction that converts the tyres to their base elements – but with no combustion and hence no smoke.

After about five hours in the reactor, the process emits a gas that fuels the entire process. External fuel is turned off and the tyres themselves provide the energy for the process to continue.

In a Zoom interview with Mining Weekly, Canada-based Kal Tire’s Mining Tire Group senior VP Dan Allan, who oversees the group’s international operations in 22 countries including South Africa, responded to these questions:

Mining Weekly: How are end-of-life mining tyres being dealt with these days?

Allan: Traditionally, and I'm going back 20 years maybe, mining companies would take end-of-life tyres and probably use them as backfill in some of their operations as they finish a zone or as they reclaim some of the land in their mines. These days – with our environmental stewardship focus, and many mining companies wanting to do the right thing when it comes to environmental regulations – there’s a need to figure out a different way to do this. We've seen the advent of things like shredding. What shredding does is crumb end-of-life tyres into little pieces for use as tyre-derived fuel – so burned for energy – or pressed into newer products or substitutable products, things like mats, flip-flop sandals and such things. But these days, we're looking for that higher and best use of the product, so that the challenge is really how do we take a tyre that's sometimes 4.5 t in weight, break that down into very usable components, and make that fit well into our environmental stewardship policies and responsibilities, and make sure that at the end of the day, it's commercially viable.

Where and why did you begin thinking about designing a solution for recycling mining tyres?

If you use something like Google Earth, and look at Chile, for example, many of these mining companies have not been allowed to bury tyres for many years, so they have yards full of end-of-life tyres. It's always been an issue for mining companies. What piqued our interest the most was that the Chilean government was introducing legislation that would require mining companies to ensure that they had a duty of care or environmental stewardship on the disposal of those tyres. At the time that was put in place, there was no real solution to help the miners deal with the problem, so we took it upon ourselves to figure out how we could help customers with this problem, and that's how we ended up in the business of tyre recycling.

What’s the solution you’ve now built and how does it fit into those words we’re constantly hearing these days – the circular economy?

In any evolution, especially in the recycling journey of any product, there’s a lot of learning that goes on and you try and work with what you've got, and then you take the next leap. From a Kal Tire perspective, we use the theme of the highest and best use of the product, so we started looking for a solution on the basis of that theme. We wanted to have something that would be able to be used again in another new product. What we use is a process called thermal conversion. Many might know this as pyrolysis, which has been around for a long time. But doing this on a very large commercial scale, with ultra large mining tyres, is quite unique. The process involves taking that 4....

South Africa could achieve 5% of global exploration spend if government were to “cut the red tape” that is hurting the mining and exploration industry more than it is helping it, diversified metals explorer Orion Minerals CEO Errol Smart told delegates at the Junior Indaba this week.

“The bureaucracy that's been killing us for the last 20 years and squeezing the life out of our industry has to be consigned to the museum and to the archives,” he said, emphasising that this change had to happen now, not later, as the situation had become so dire that there was no more time for debate.

Smart was attempting to debunk the assertion that South Africa would never achieve 5% of global exploration spend. He stated that South Africa was home to a wealth of metals and minerals that could fuel the energy transition, thereby bolstering the local economy and creating thousands of jobs.

However, he expressed frustration with the Department of Mineral Resources and Energy for making the administrative processes behind securing and acting on mining rights harder than it needed to be, thereby hamstringing the industry and scaring away investment.

Smart said that, if the DMRE “cut the red tape” and provided a cadastre, the South African mining and exploration industry could take advantage of the energy transition to bring money into the country.

“Everybody blames miners for the state of the environment, but the only way out of the corner that we're in is by mining critical minerals. Without critical minerals, we don't have renewable energy, we don't have just transitions and we don't have a future,” Smart said.

He said the implementation of a working cadastre was a critical and urgent part of achieving greater exploration spend.

“[With a cadastre in place], we can all measure each other. We can measure the DMRE and they can measure us and it will be transparent, simple and efficient. Then we can operate and there will be a flood of money into this country,” Smart concluded.

South Africa’s public markets are no longer fit for purpose in a resource-rich economy, said AmaranthCX director Paul Miller, unpacking the state of public markets in South Africa at the Junior Indaba, held on June 1 and 2.

“South Africa has a hidden superpower. It has 85% of all pension fund savings in Africa and the nineteenth largest public equity market globally – while only ranking thirty-second in terms of economy size.

“We punch way above our weight in terms of the depth of our public market relative to the size of our economy.”

Public market capitalisation in South Africa is about four times the size of gross domestic product. Miller added that the market is well regulated and developed, with fully developed mining and exploration listing regulations to boot.

Upwards of 40% of assets in the public market are held by foreigners, attracted to the local market.

However, Miller questioned why it is not working, since the market is losing listings year after year, with very few true initial public offerings being made and no junior mining and exploration companies able to raise money locally.

“In 1980, the JSE held about half of the world’s mining capitalisation. Today, there are only 40 mining companies listed on the stock exchange, with only 12 being small cap stocks,” he pointed out, citing data by fund manager, mining engineer and analyst Peter Major.

“Why do we have this dichotomy between the market that punches way above its weight in a resource-rich economy that can barely attract junior mining investment?”

The net number of listings on the JSE have steadily been decreasing from 665 in the 1990s to about 300 currently, which Miller attributed partly to the removal of passive holding companies; however, there remains the phenomenon where 20 to 30 de-listings are occurring, on average, every year – exceeding the number of new listings.

About 97%, or R19-trillion, of all gross market capitalisation on the JSE is in companies in the top 100, while the remaining 3% of market capitalisation, or R520-billion, is in the 200 companies outside of that.

Miller explained that the JSE has a massive concentration of market capitalisation in the upper third of the market.

“The actual trade is all happening within the top 100 companies, in fact, mostly in the top 40 companies. If that is who is selling shares on the stock exchange, who is buying shares on the stock exchange?”

By Miller’s calculations, about 90% of all long-term savings assets are managed by just 11 institutions, including long-term insurance assets. South African institutional funds are also undoubtedly highly concentrated.

“Both sides of the equation are thus highly concentrated – the market capitalisation of companies and the assets under management by institutions. This results in the local public markets favouring size above all else.”

This supposedly leaves retail investors to pick up the slack for the 200 companies outside the top 100.

“However our stockbrokers have mostly morphed into wealth managers, have tried really hard to put all their clients into institutional funds too. Therefore, most retail investors have been moved into model portfolios that mimic the funds managed by the top 11 institutions, again investing overwhelmingly only in the top 100 companies. This while online stockbrokers, the last redoubt of direct retail investors, tend to only support secondary trade, not primary capital raising,” Miller explained.

He argued that the market is so concentrated because of the benefits posed by tax incentives for savers that, in fact, disproportionally benefit large institutions. “In order to access the deferred tax benefit on pension funds, SA savers are forced to invest via institutions and have no self-managed options, as opposed to other jurisdictions like Canada, the US, the UK and Australia, for example.

“Our rent-seeking dominant institutions make sure that tax incentives are only available to you if you invest through them and pay them fees f...

Mining Weekly Editor Martin Creamer discusses the JSE’s reforms highlighted at this year’s Junior Indaba; attracting venture capital funded juniors to invest; and Sedibelo Platinum Mines's role in the country’s green hydrogen effort.

If you want to raise real risk capital for exploration, you need Canadian-style investors to provide it, the 2022 Junior Indaba heard on Thursday.

While it was acknowledged that South Africa has the money, it was also reiterated that the country is just not channeling it into exploration, where the indaba hybrid audience was told of an investment that appreciated in value by ten times their initial purchase price.

Osino Resources CEO Heye Daun, on stage with Junior Indaba chairperson Bernard Swanepoel, told of dreaming up Osino in 2015 after having success a couple years before when he, together with Canadian colleagues, acquired a discarded project in Namibia from the now defunct South Africa-based AngloVaal.

They paid $25-million for it, drilled it hard, advanced it to feasibility stage and sold it two years later to B2Gold for just under $200-million, so it was almost a ‘tenbagger’ for them – an investment that appreciates in value by ten times its initial purchase price.

B2Gold, founded in Canada in 2007, when on and built a very successful gold mine, which is set to make $200-milion of free cash a year as a literal $1-billion company.

B2Gold became the blueprint for Osino which Daun as a born and bred Namibian mining engineer felt he may be able to repeat.

Again together with Canadian financiers, Osino and geologists put together a land package in Namibia and had to do the exploration itself in the absence of other gold projects in Namibia.

Through systematic and holistic exploration, Osino discovered Twin Hills through thick sand and calcrete cover 20 km from Navachab, which is the biggest regional gold resource outside of South Africa’s world-renowned Witwatersrand Basin. The Karibib district project is held through 14 licences comprising a156 000 ha of geology that straddles the towns of Usakos, Karibib and Omaruru.

The official resource of 2.7-million ounces of gold is now expected to grow to 3.5-million ounces in the next to few years to 3.5-million to four-million ounces.

“It is one of 28 major discoveries of the last ten years globally,” Daun said, adding that Osino is looking to turn it into Nambia’s biggest gold project by replicating and then bettering what B2Gold did with the project sold to it.

“We now have a quality asset. We’re turned the dream into reality,” Daun told the conference covered by Mining Weekly.

Twin Hills has taken two-and-a-half years to advance from discovery to the prefeasibility stage.

MOSTLY UNDER COVER

Namibia has the sedimentary orogenic Pan African Damara Belt, which is very prospective. Its issue is that, very similar to Botswana, it is mostly under cover, which is why it is only now emerging as a special gold and copper mineralising belt right now.

“There are some other companies that are doing very similar things to what we’ve done in gold in Botswana and in Namibia, so I think you’ll hear a lot more about this region in terms of new discoveries.

“Namibia is a very pleasing place to work. Obviously, I’m very impartial to it being a Namibian myself.

“What Osino has achieved I think is a textbook of what exploration can achieve in bringing foreign direct investment into countries along with socio-economic development,” said Daun, who described Osino as having “by far” the biggest licence position of anyone in Namibia.

It has spent $50-million on exploration in the last three to four years and is transitioning from being an exploration company to being a mine developer.

It is at scoping study stage, which Canadians refer to as the preliminary economic assessment (PEA) stage.

Osino is a Vancouver-headquartered Toronto Stock Exchange Venture Capital company

Being a Canadian company, it is regulated by the stock exchange codes.

“Most people still measure us by the PEA, which we publicised in the middle of last year, which showed some very credible numbers. But we’ve been very active since. We’ve drilled 100 000 metres, we’ve spent millions doing studies, and we’re in the final lap of c...

Diversified miner South32 has completed the acquisition of an additional 16.6% shareholding and related rights in Mozal Aluminium from Mitsubishi’s MCA Metal for a final cash consideration of $200-million.

The company last year exercised its pre-emptive rights over the additional shareholding, matching a headline purchase price of $250-million to acquire the interest.

South32 on Wednesday said that the final cash consideration reflected elevated cash and working capital adjustments at acquisition date as the business continues to benefit from strong aluminium prices.

Following completion, South32’s shareholding in Mozal Aluminium will increase to 63.7%, with its equity share of aluminium production now expected to be 281 000 t for F2022 and 370 000 t for 2023.

“Our acquisition of an additional interest in Mozal Aluminium is another major milestone and comes 22 years following the commissioning of the hydro-powered smelter. It further integrates our position along the aluminium value chain with the smelter a major customer of our Worsley Alumina refinery,” South32 CEO Graham Kerr said.

“We are continuing to increase our exposure to metals important to a low carbon future. Following today’s completion and the progress with the Alumar aluminium smelter restart in Brazil using 100% renewable power, we remain on track to grow our annualised equity share of green aluminium production by more than 100% before the end of 2023, taking the group’s total aluminium production next year to 1.23-million tonnes.”

The June 1 launch of the JSE’s new Cutting Red Tape initiative to make listing on the JSE considerably easier, faster and more sustainable is twinning with the JSE’s other private placements inventiveness that provides for the raising of capital in the private market for minerals exploration and the startup of new mines.

JSE head of origination and deals Sam Mokorosi highlighted these two far-reaching advances at the exploration-focused 2022 Junior Indaba, which heard that the Toronto Stock Exchange has 1 600 small-cap mining companies and the Sydney Stock Exchange 600 compared the JSE’s miniscule 12.

“From a JSE perspective, there is a long history with the mining industry, which was, in fact, the reason for our existence as a stock exchange over 135 years ago,” said Mokorosi.

Mokorosi told the hybrid conference covered online by Mining Weekly that these major steps had been taken by the historic exchange on account of the declining number of listings in specifically the small-cap space that is occupied by junior explorers and junior miners.

“What we’ve seen is that people are raising capital for exploration for starting up new mines in the private market so we’ve now launched JSE Private Placements, which allows for people to raise capital, and we’ve already seen, in the last couple of months since we’ve launched, that there’s a lot of appetite in the mining space to raise capital privately.

Then, in the JSE’s core listed space, the JSE has recognised that it can make staying listed easier in addition to making listing easier and faster as well as advancing its wholly owned JSE Private Placements (JPP) venture, which has obtained its financial services provider (FSP) licence, unlocking an opportunity for the JSE to enter the private equity and debt market in South Africa and across the continent. By the end of March, the platform had R5-billion ready for deployment and one project already under way.

To do this it has come up with Cutting Red Tape, launched on the opening day of the two-day Junior Indaba, involving the putting in place of a new JSE board that is not quite as stringent as its main board, but still gives investor protection.

It is lighter in terms of processes and regular paperwork than what is demanded of main board listings.

“So, we’ve put that out into the market to say let us know if these are the right things that will make a difference, so we are looking to make life easier for listed companies and help unlisted companies to raise capital through the JSE.

Panel moderator Kolobe Nala Investment Company CEO Billy Mawasha requested ENSafrica executive tax head Andries Myburgh to outline the workings of the export-promoting flow-through tax incentive amid the JSE taking steps to be easier to operate within.

The flow-through scheme is the basis of Canada’s exploration success and Mawasha asked Myburgh to elaborate on why it has been so long in coming in South Africa although efforts had been made with National Treasury for several years.

“If all of the departments pull together, now is the time to do it,” said Myburgh.

NEW ERA

As reported earlier by Engineering News & Mining Weekly, the JSE is entering a new era as it leverages JPP to build a future-fit capital market delivering a seamless digital marketplace that matches private debt and equity issuers with investors.

The strategic decision to broaden its revenue stream by entering the private equity and debt market is in response to a shift in capital formation that has been emerging over the past decade.

JSE capital markets director Valdene Reddy has been reported as saying that there has been a global trend away from public markets to private markets, which show phenomenal growth in capital formation and allocation.

“By launching JPP, the JSE is providing an alternative to raise capital, through either private equity or private debt, which stands alongside our public market space,” she says, noting that the firm is strongly focused on national agenda ob...

JSE- and NYSE-listed Gold Fields and Americas-focused gold producer Yamana Gold have entered into a definitive agreement under which Gold Fields will acquire all of the outstanding common shares of Yamana Gold pursuant to a plan of arrangement.

The transaction implies a valuation for Yamana of $6.7-billion.

Upon closing of the transaction, it is anticipated that Gold Fields shareholders and Yamana shareholders will own about 61% and 39% of the combined group, respectively.

The acquisition of Yamana by Gold Fields is expected to significantly strengthens the ability of the combined company to deliver on Gold Fields’ three strategic pillars – maximising asset potential; advancing environmental, social and governance (ESG) commitment; and growing the value and quality of its asset portfolio.

The combined group is said to have the potential to create considerable long-term value for shareholders through greater scale, an industry-leading portfolio of assets, an enhanced production profile with significant growth potential, operational and geological synergies, and a strengthened financial profile for future growth and shareholder returns.

Gold Fields CEO Chris Griffith told Mining Weekly the transaction was entirely aligned with part of Gold Field’s strategy towards growing the value and the quality of the company’s portfolio of assets.

He explained that, once the company finishes the construction of the Salares Norte project, in Chile, it will not have any new developments or exploration projects in the pipeline, and once it reaches a peak production of 2.8-million ounces of gold when Salares Norte comes on stream, its production profile would begin dropping off.

Therefore, Gold Fields has been evaluating many different companies and individual projects, and Yamana was identified as being the most suitable acquisition target owing to its portfolio of assets holding the potential to grow the quality and the value of Gold Fields’ portfolio of assets, Griffith notes.

Moreover, he says Gold Fields also wants to bulk up its South American operations, as it only has a single asset in Peru and a single asset in Chile, which is not an efficient approach towards the region.

Moreover, the company has also been keen to enter Canada for some time, and Yamana provides that access.

The combined company would have 14 operating assets, a production pathway to four-million ounces a year, a market capitalisation of $15.9-billion and gold-equivalent reserves of 81-million ounces.

Griffith said the company would continue to take a disciplined growth approach towards projects and investigate these and their potential carefully.

Following completion of the transaction, Gold Fields will remain headquartered in Johannesburg, and listed on the JSE with secondary listing on NYSE, Griffith informed.

Yamana shares will be delisted from the TSX, the NYSE and the LSE.

The combined company would undertake a regionalised model approach to running the business and operations across different regions.

Griffith outlined that, as the company is tax domiciled, growth will provide tax benefits to the South African government and Johannesburg will remain the hub of the business.

Griffith said shareholders of both Gold Fields and Yamana would vote on the proposed transaction during the third quarter, while the transaction is likely to be finalised in the fourth quarter.

Following completion of the transaction, Griffith said the combined company would become the fourth-largest gold miner by gold production.

He emphasised that this was not the main objective of the transaction, rather, it was to create value, take the company down the cost curve, increase cash flows, improve its jurisdictional attractiveness and create a pipeline of assets.

Griffith acclaimed that the transaction is aimed at long-term value creation, is complementary to the business, and in Gold Fields’ view, will create substantial shareholder value.

Gold Fields’ board believes that offering the Gold...

Sedibelo Platinum Mines, in South Africa’s North West province, will be playing a very important part in South Africa's green hydrogen effort to ensure that it contributes to a greener South Africa, chairperson Arne Frandsen assured Mining Weekly on Tuesday.

Frandsen is the managing partner and co-founder of the Pallinghurst Group and the leading light of the New York- and Toronto-listed Nouveau Monde Graphite, of Canada, businesses that work in close collaboration with the Industrial Development Corporation (IDC) of South Africa and the IDC equivalent in Québec, Investissement Québec (IQ).

Together, they are bringing no-compromise green mining to South Africa through sun and wind energy that will energise the smelterless Kell process at Sedibelo’s Pilanesberg Platinum Mines, and the North American battery materials platform to Québec. (Also watch Creamer Media video.)

In Canada, Frandsen has spent years co-developing a strategy to deliver a zero-carbon battery grade graphite, and in South Africa he is overseeing the process building at Sedibelo’s platinum group metals (PGM) operation that is poised to be South Africa’s greenest yet.

This month, yet another boost for Québec graphite was brought about by Nouveau Monde Graphite and Mason Graphite concluding an investment agreement, which brings together two North American deposits of world-class size in North America.

“What it will allow us to do in North America is to provide the battery platform with green graphite for use in batteries,” Frandsen told Mining Weekly in a Zoom interview.

The Pallinghurst Group now has within its fold all the key elements needed for lithium-ion batteries, fuel cells and the green hydrogen economy.

“We’ve been very active in Québec. We formed a very good relationship with IQ, the government equivalent of South Africa’s IDC.

“It’s been a lot of hard work involving a lot of great cooperation with the government of Québec,” he said.

Already built is the first part of Nouveau Monde’s graphite anode material plant and the starting ribbon has been cut for Nemaska Lithium.

Both materials are critical for battery making, and both activities that we are commencing there will ensure that the battery materials platform in North America for electric vehicles will be based out of Québec.

Late last year, it also brought nickel, copper and cobalt into the group.

Mining Weekly: To what extent do those critical metals round off Pallinghurst’s overall offering to the unfolding green economy?

Frandsen: Nickel, copper and cobalt were the missing parts. You can't have a battery without an anode, and an anode can’t be made without graphite, and we ticked that, and in virtually whatever form of chemicals you want to have in the battery, lithium is going to play a very critical role. You could just look at the periodic table, you see where lithium sits (lithium is the third-lightest element of the periodic table after hydrogen and helium), and unless you start finding new elements in the world, then it will always be a very critical part of any battery, and in securing, we secured the cathode part of the battery, one of the critical building blocks, and, as you have seen how lithium has performed, it has been the sterling outperformer of all commodities, so I think we got that one right. What we missed were really the other elements of the cathode, which were the nickel, copper and cobalt. We spent a lot of time on this. The Pallinghurst team has been ploughing around in Canada and in the US to find the right deposit and in Talon Metals and the underlying Tamarack nickel/copper/cobalt project that we are part of with Rio Tinto, we have found what is for sure the best US deposit of those polymetallics. As you saw earlier in the year, we made the first-of-its-kind offtake agreement with Tesla, which means that Tesla’s Austin plant will benefit from the material that we're going to mine in Minnesota, where carbon capture is planned.

Turning to South Africa, how much of t...