Concern about mineral resource scarcity is widespread and, at the same time, many countries, such as Australia, Canada and China, are investing significantly in strengthening their mining-related research, development and innovation (RDI) capabilities.

“This makes cost and differentiation competitiveness a challenge for South Africa,” states Council for Scientific and Industrial Research (CSIR) CEO Dr Thulani Dlamini in an Op-Ed to Mining Weekly, in which he emphasises that it will require all mining RDI stakeholders – Minerals Council South Africa, mining companies, mining equipment suppliers, government and research institutions – to have an integrated plan for South Africa’s mining industry to become globally competitive in niche areas.

As an entity of the Department of Science and Innovation (DSI), CSIR hosts the Mandela Mining Precinct, the largest public-private partnership of its kind between the DSI and the Minerals Council.

With significant investments required to achieve mining modernisation goals, CSIR has partnered with the Minerals Council and other mining stakeholders in the development of the CSIR Mining Roadmap to revitalise mining extraction RDI.

“Much like mining is the cornerstone of the South African economy, harnessing RDI to deliver value is one of the cornerstones of competitive industries,” Dlamini accentuates.

While South Africa holds the overwhelming percentage of the world’s platinum reserves, he points out that extraction is inhibited by:

increasing depths to safely access mineral deposits;

low efficiency and productivity with a high cost of production;

ageing infrastructure; and

skills shortages.

“We must admit that holding 80% of the world’s platinum reserves is of little value if the country cannot benefit from the extraction and beneficiation thereof.

“Changing the way we mine means equipping ourselves with information about the host rock that would enable efficient and accurate decision-making,“ notes Dlamini, who adds that CSIR’s geophysicists have been optimising a suite of geophysical techniques for safer extraction of minerals amid understanding that the provision of detailed orebody knowledge ahead of mining is crucial to mitigate falls of ground and ensure optimal extraction.

He applauds mining operations that regularly report zero fatalities and highlights CSIR’s provision to mines of safety training through its Kloppersbos fire and explosion research and testing facility, which is being enhanced with the inclusion of virtual reality-based immersive training modules for emergency preparedness, including the correct use of self-contained self-rescuers.

LEARNING FACTORY

With technological innovation at its core, CSIR has set up a one-of-a-kind learning factory in partnership with the Manufacturing, Engineering and Related Services Education and Training Authority to leverage Fourth Industrial Revolution (4IR) opportunities.

This facility’s technology development reflects CSIR’s engagements with organised labour and augments a memorandum of understanding the Mandela Mining Precinct signed with organised labour last year to ensure full participation in the modernisation research agenda.

In view of the need for skills development for the operation of 4IR technologies, CSIR has partnered with industry through the Mandela Mining Precinct to establish an underground test facility at Royal Bafokeng Platinum’s Maseve mine.

Dlamini points out that 4IR technologies to improve safety, productivity and efficiencies have become an important value driver for the mining industry, with research by Accenture showing that digital technologies can assist mining houses to unlock R153-billion in value by 2026.

He foresees the ability to predict productivity, safety and financial sustainability as becoming a key future mining industry enabler and points out that CSIR’s product lifecycle management capability provides a means to simulate ‘what if’ scenarios to support future decision-making processes.

CIRCULA...

Lack of expertise about getting giga-scale hydrogen projects off the ground is a big problem in the industry, say Allen & Overy South Africa’s Alessandra Pardini and Alexandra Cluver, who believe they know how best it should be done from experience gained through project managing three of the world’s largest green hydrogen projects.

Mining Weekly can report that all three of the projects referenced are in the Middle East. These are projects that Allen & Overy teams in the Middle East have been working on, in terms of bringing green hydrogen to market. As a firm, Allen & Overy is involved globally in a number of green hydrogen efforts, including projects that have taken place and are in process across Europe and now in America and Australia. (Also watch attached Creamer Media video.)

As global appetite for giga-scale green hydrogen projects grows, the business risks associated with getting this promising industry out of the starting blocks are considerable. Still, they believe that green hydrogen has the potential to transform many sectors, including shipping, aviation and power generation.

“This is thanks to its long-distance transportability from warm and windy locations like South Africa, to energy-hungry markets such as Europe who are at the forefront of exploring its potential as a climate-friendly energy source,” Pardini and Cluver state in a release to Mining Weekly.

“It’s an incredibly exciting time to be involved in the green hydrogen industry, but in order for it to reach meaningful global scale, as it should, it’s necessary to address some of its start-up challenges,” they say, adding that it is absolutely vital to prepare a solid go-to-market strategy that tailors procurement processes to meet the demands of bankers, equity investors, offtakers and other key stakeholders.

They believe the starting points should centre on whether or not the green hydrogen/ammonia plants should be built under a single engineering, procurement and construction contract or under multiple contracts, the manner of tailoring the required procurement processes and ascertaining the plant’s long lead items.

HOW TO FINANCE GREEN HYDROGEN

They foresee giga-scale projects in the nascent sector more than likely involving multi-sourced financing, in which commercial banks combine with development finance institutions and export credit agencies.

“It is necessary to put clear thought into how those parties will come together to serve the best interests of the project.

“It is also necessary to put careful thought into the greater business and financial plan of the project, especially considering that most such projects take several years to become fully operational and a clear revenue strategy is critical in order to ensure that it is bankable,” they emphasise.

ADVISORY TEAM BUILDING

Giga-scale projects, they point out, require the best global expertise as well as local depth of knowledge.

On green hydrogen, they say: “It's a new industry – real expertise out there is limited and one wants to work with experts who really know what they are talking about in terms of international requirements and local nuances.

Also seen as crucial is solid regulatory advice to ensure that the project meets global green energy standards but – very importantly – also bring in advice on project development aspects such as procurement and construction, and project finance aspects such as banking, investment and funding models.

OFFTAKE STRATEGIES AND AGREEMENTS

Pardini and Cluver point to the importance of the structuring of any large-scale energy project being right from the get-go and place emphasis on the ultimate buyer of the green hydrogen and green ammonia and how the buyer intends to use the products.

“Not all hydrogen is made equal. What is the offtake strategy and who is the offtaker? What is legally possible to achieve within the budget, timeframe, business plan and available resources?,” they ask.

Unlike ‘brown hydrogen’ produced from fossil fuels, ‘grey hyd...

Diversified metal recovery business Jubilee, which is rolling out an investment of R786-million in South Africa and Zambia, has offered employment and contractor opportunities to more than 800 people in Zambia, most of which are long term, the company stated in a release on Monday.

In Zambia, the London Aim and Johannesburg AltX company is targeting copper and cobalt through its Project Roan concentrator commissioning and Sable Copper and Cobalt Refinery, while in South Africa, its new and expanded Inyoni Operations is exceeding chrome and platinum group metals (PGMs) throughput targets.

“Crucially, and in line with our goals to promote sustained, inclusive economic growth, the Southern Copper Refining Strategy has resulted in significant job creation, with total jobs filled in Zambia reaching near 800 during the last 12 months,” Jubilee CEO Leon Coetzer, who spent 16 years with Anglo American Platinum, stated in the release to Mining Weekly.

With the completion of the construction of Project Roan, accelerating investment into the Northern Refining Strategy targeting the Luanshya, Kitwe and Mufulira areas of Zambia is also in sight.

Chaired by Colin Bird – formerly of Anglo Coal – and vice-chaired by Dr Mathews Phosa – Mpumalanga province’s first Premier in 1994 – Jubilee is on course towards achieving its PGMs production target of 44 000 oz/y through its 100%-owned Inyoni alone and is targeting 1.2-million tonnes of chrome concentrate a year.

On a chrome by-product credits basis, Jubilee’s net first-quarter cost of producing an ounce of PGM was $433/oz excluding transport costs of $198/oz.

Project Roan is expected to complete targeted ramp-up of 830 t of copper a month during July 2022. The new cobalt circuit is expected to commence commissioning next month at a cost of $81 000/t of cobalt.

Jubilee’s business model focuses on recovering metals from mine tailings, waste, slag, slurry and other secondary materials generated from mining operations.

While extracting financial returns, it rehabilitates environments scarred by the surface footprint of historical mining operations, solving air and water pollution issues associated with those installations.

Minimising the environmental footprint of mine tailings contributes to the fight against climate change and the reduction of the mining industry's carbon footprint.

Jubilee’s portfolio across South Africa and Zambia provides exposure to not only PGMs, chrome, copper and cobalt, but also lead, zinc and vanadium, and the recovery circuits for these metals are planned to be incorporated at the Sable Refinery, Jubilee states on its website.

What the World Platinum Investment Council (WPIC) is forecasting for 2022 is a reduced but still large platinum surplus of 627 000 oz.

But this surplus is extremely vulnerable to the issues the WPIC thinks may play out, particularly:

slightly higher vehicle loading;

certainly more substitution of platinum for palladium;

concerns about supply from Russia, and

those Russian supply concerns probably leading to more substitution of platinum for palladium. (Also watch attached Creamer Media Video.)

Equally, global risk and supply from Russia may prompt people along the supply chains and their counterparties to increase their buffer stock levels.

A little bit of stock increase by people using the metal, together with a bit more substitution, could suddenly turn the surplus into a balance or a deficit.

China importing more platinum than its identified needs was another factor that manifested itself very strongly last year. Right now, with all the concerns, speculative importing of platinum by China could be even higher.

The captivating thing for potential investors is that this is looking quite interesting for platinum, despite the surplus.

Moreover, many potential investors in platinum are likely to now be more acutely aware of the linkage between platinum and the hydrogen economy, the use of platinum in both producing green hydrogen and using green hydrogen in fuel cell electric vehicles.

“I think that's got a lot more people looking at platinum,” WPIC research director Trevor Raymond commented to Mining Weekly during a Zoom interview.

“And then when they look at platinum, it's not really about the demand growth because that fuel cell volume tends to be several years away, but the issues of constrained supply and demand growth,” he added.

Platinum supply is forecast to fall 5% in 2022 against a forecast demand increase of 2%.

“More people are looking at platinum and certainly much greater investor interests and more people are actually buying,” added Raymond.

Despite unprecedented headwinds, annual automotive demand in 2022 is forecast to rise 16%, WPIC stated in its May 16 first-quarter Platinum Quarterly, that has a revised full year forecast for 2022.

Unprecedented events in the first quarter of this year have had a huge impact on supply and demand, adding a layer of complexity on top of pre-existing issues, which will continue well into 2022.

During the quarter, both demand (-26%) and supply (-13%) fell year-on-year leaving the market in first-quarter surplus of 167 000 oz.

Amid the forecast of lower supply and greater demand, the surplus forecast for 2022 is a good 500 000 oz lower than the surplus forecast for 2021 of 1 128 000 oz.

The main thing that has driven down the surplus is the unwinding of the Anglo American Platinum inventory and mining production levels being below the levels of prepandemic 2019.

There have also been operational, covid, safety, labour and power outage difficulties and going forward there are many furnace rebuilds, which will lower stock levels.

There is also the supply risk out of Russia, which provides 10% of global platinum supply.

Recycling is down on fewer end-of-life vehicles entering scrap supply owing to fewer new vehicles being sold.

Moreover, the automotive industry’s global supply chain issues and global chip shortages that were already concerning have been aggravated by Russia’s invasion of Ukraine.

“So, we've got a lot of issues, and equally the global sentiment in terms of inflation, higher energy costs, tends to play into people buying fewer vehicles,” noted Raymond.

But despite the significant drop in the number of vehicles, automotive demand for platinum has been surprisingly strong, and is expected to go up by another 16% for the full year, driven by firstly the substitution of platinum for palladium.

“We've still got palladium trading at a $1 300 per ounce premium over platinum and that's been aggravated by supply concerns for certainly palladium out of Russia, Russia providing...

The first tons have been hoisted at Marikana K4, Sibanye-Stillwater’s high-return resumed platinum group metals (PGMs) project, which was largely predeveloped and equipped when acquired from the now defunct Lonmin in 2019.

“The K4 project is an unrivalled, top-tier project in the PGMs industry, which will deliver significant value and benefits for all stakeholders for many years,” Sibanye-Stillwater CEO Neal Froneman stated in a release to Mining Weekly.

Johannesburg- and New York-listed Sibanye-Stillwater is investing R4-billion in the project, which, in addition to creating more than 4 000 direct jobs over its 50-year life, is generating local business opportunities and providing valuable economic development and skills transfer for communities.

K4 this month become the sixth shaft within the large Marikana PGMs mining complex, which is situated on the western limb of the Bushveld Complex, 40 km east of the town of Rustenburg, in South Africa’s North West province.

As a whole, Marikana has four element (4E) PGM mineral reserves of 22.3-million ounces and 4E PGM mineral resources of 128-million ounces, estimates that include tailings.

K4 will access both the Merensky and upper group two (UG2) reefs to average 250 000 oz/y at steady state, with its main shaft extending down 1 332 m and its vertical shaft to a depth of 1 078 m.

Associated surface infrastructure is largely in place, with only minor refurbishments required and K4’s concentrator plant is fully operational, at a nameplate capacity of 130 000 t of Merensky and UG2 reef a month.

K4 joins operations such as K3, Rowland, Saffy, 4Belt, and E3. Conventional up-dip down-dip mining, together with limited breast mining, is the predominant method of mining employed.

The ore mined at the Marikana operation is processed through on-site concentrators with a combined milling capacity of 600 000 t a month. The concentrate produced is dispatched to the smelter where a sulphide-rich matte is produced for further processing at the Base Metal Refinery (BMR). At the BMR, base metals (nickel and copper) are removed and the resulting PGMs-rich residue is subsequently sent to Sibanye-Stillwater’s Precious Metal Refinery (PMR) in Brakpan, on the East Rand, for final treatment. PMR produces the final precious metal products.

Sibanye-Stillwater’s Southern African PGM operations consist of three managed PGMs-producing underground operations – Marikana, Rustenburg and Kroondal – as well as an opencast operation at Kroondal and all related surface treatment facilities in South Africa.

In addition, the PGMs segment has a 50% attributable in the Mimosa mine, a non-managed, underground operation in Zimbabwe.

The Rustenburg operations are serviced by four concentrators and the Kroondal operations by two concentrators.

Apart from the primary mining operations, the group has several tailings retreatment operations.

Exploration assets include Akanani, which is located on the Northern Limb of the Bushveld Igneous Complex, near the town of Mokopane, the Limpopo exploration project, situated 50 km southeast of Mokopane, and the Blue Ridge Platinum exploration project, a 50% attributable joint venture.

Original-equipment manufacturer Trident SA has diversified its offering and is now providing lithium-powered batteries for locomotives used by global mining operations.

During a visit to the company’s site in Germiston, Gauteng, where the locomotives and battery packs are assembled, Trident global marketing manager Simon Lewis told Mining Weekly that this was a switch from the conventional lead acid batteries used in locomotives.

He noted that, with the global push towards sustainability, as well as the company looking to capitalise on the benefits provided by lithium technology, the technical team identified the possibilities and advantages of using of using lithium batteries as an alternative to traditional lead acid batteries.

Trident designs locomotives for underground hard rock mining operations. Of the mining and tunnelling locomotives that it manufacturers, about 90% are battery-powered units, with the remainder trolley line or “combination” (battery and trolley – the battery is deployed in mining areas where no trolley line exists) locomotives.

Lewis explained that, typically, when buying a battery locomotive, the customer would buy two lead acid battery packs – one for use on the locomotive on its current shift, and the other on standby being charged at a unit for the next shift.

The latter would likely be on charge for the entire duration, or the majority of the current shift, given that it takes eight hours to fully charge a lead acid battery.

By comparison, only one battery pack is required per locomotive for lithium batteries, instead of the usual two lead acid batteries.

Lead acid batteries also require a large unit to be charged, which leads to space constraints underground.

By comparison, no charging bay is required with the new lithium battery, as Trident has integrated the charger into the battery pack. Therefore, the lithium battery can merely be plugged in the nearest available or convenient power source for charging.

Lewis explained that, while other manufacturers offer lithium batteries, Trident is a pioneer in this integrated model, with the charger combined with the battery pack.

Owing to the integrated charger on the locomotive and the speed of lithium charging, recharging of the locomotive can be undertaken during the shift change, as this takes two hours, compared with the eight hours required by lead acid batteries, he pointed out.

Also, the expected lifespan of a lithium battery pack is around ten years, compared with the four-to-five-year lifespan of a lead acid unit.

As a result of the specifications alluded to above, these lithium batteries reduce mining set-up costs, as charging units do not need to be created and also result in space savings, as charging units are negated.

Moreover, as these batteries do not need to be charged in the same manner as lead acid batteries, this leads to time savings in having to change batterie, while less handling of the batteries, that is, removing and replacing them, also results in a lower risk of injuries.

This also leads to efficiency improvements, as locomotive operators do not have to wait for the batteries to charge for such a long period of time, and for these to be changed after each shift.

Lewis outlined another advantage of this technology as the physical size of the lithium pack being narrower. This means that it takes up less space on the locomotive, and therefore, daily maintenance and inspections of the locomotive braking system and other subsystems can be done via access doors on each side of the pack, without removing the pack, as had to be done for lead acid units. This is estimated to reduce handling by 85%.

Lewis also indicated that lead acid batteries release toxic gases and fumes as they operate in the underground environment.

Therefore, by comparison, the lithium battery is more environment-friendly, and also provides cost benefits as a filtering system does not have to be installed underground to account for this.

Moreover, Lewis said ...

A potential food crisis may be brewing in South Africa as domestic coal consumers face increasing difficulty in securing coal supplies at a fair price to fire their processing plants, says commodity insights and marketplace company African Source Markets CEO Bevan Jones.

He tells Mining Weekly that, currently, South African producers of high-quality coal are increasingly neglecting the domestic industrial sector as a result of high US Dollar export coal prices.

Coal started its rally in late 2020 amid a failure of European Union renewable power to generate sufficiently; natural gas shortages; and as demand for electricity surged, following the easing of Covid-19 restrictions.

However, coal prices showed signs of easing this year, until Russia’s invasion of Ukraine served to massively boost demand for coal, especially in Europe, after many energy consumers there sought to reactivate their coal plants as natural gas prices soared. Once sanctions were imposed on Russian coal, European buyers had to scramble to source alternative supplies of coal, with a sudden and huge demand for South African coal.

Other factors driving up demand and prices for coal include an industrial revitalisation after Covid-19 restrictions were lifted, global coal logistics issues, lower exports out of Indonesia, flooding in Australia that impacted on coal supply from mines and a significant heatwave in India that is resulting in coal shortages as electricity demand spikes.

Coal prices reached an all-time high of $400/t in March and averaged $330/t through the month, according to commodity insights company Standard & Poors Global.

Newswire Bloomberg reports that, in the US, the burning of coal is in the midst of its biggest revival in a decade, while China is reopening shuttered mines and planning new ones.

Back on home soil, many coal-burning industries, barring coal-fired power stations, are increasingly finding it difficult to secure domestically produced coal at an affordable price, says Jones.

“I am increasingly concerned about the lack of coal supply to domestic coal users, especially food processors.

“I am sounding the warning on this quite early and it’s likely that several of the larger food producers might have adequate supplies and stocks for now. But I know several who do not, and are literally operating hand-to-mouth right now,” he tells Mining Weekly.

“Every man and his dog is currently trying to target the coal export market, especially the Mozambique-based Matola coal terminal. Transnet is having difficulties providing enough rail, while the number of trucks being requested for coal export is simply staggering.

“The amount of noise and over-promising in the market right now, driven by pure greed at achieving around R3 000/t free-on-truck (FOT) from Witbank, has reached pandemic proportions,” states Jones.

He explains that South African coal miners are primarily targeting the export market at over R3 000/t FOT from Witbank, while domestic users – who typically burn A-grade peas – cannot afford more than R1 500/t.

Increasingly, Jones says, local coal users are faced with plant closures as a result of unfeasible coal prices and an inability to efficiently run operations as a result. “Their only option is to look at closing down plants, which means food shortages in products such as sugar and potentially maize meal and other basic foodstuffs.”

There is also the risk that some hospitals and prisons may not receive their coal deliveries, although most are supplied under long-term government contracts. Several have the option to use gas-fired boilers instead, although gas prices are also high.

State-owned power utility Eskom is not facing coal price concerns, “not yet anyway,” as a result of it requiring lower-quality coal, secured also on long-term supply contracts at predetermined prices, he says.

But, for other domestic coal burners, such as the food processing industry, Jones says it is “insane” to be faced with potentially having to shutt...

Mining Weekly Editor Martin Creamer attended the Investing in African Mining Indaba, in Cape Town, this week and unpacks the top stories coming out of the Indaba.

Any just transition, particularly in Africa and South Africa, needs to be job centered, says World Coal Association CEO Michelle Manook.

Speaking at the Just Transition & The Future of Coal in Africa panel at the Investing in African Mining Indaba 2022, held this week, she noted that coal-fired power plants employed 113 000 people directly in South Africa alone, with the sector supporting another 340 000 indirect and induced jobs.

Manook said that any just transition to clean energy had to consider the impact on communities and their future. This was especially true as more than 90% of jobs in the renewables sector were temporary.

These numbers signalled a warning not to rush through a transition without weighing local costs and benefits.

Manook added that it was necessary to rethink the assumptions held around fossil fuels – especially its importance to emerging markets and developing economies.

“There is no one silver bullet to realise climate ambitions, and no one perfect pathway for all of us to reach our destination.

“We recognise that more action is required from the [coal] industry itself . . . coal can abate 99% of its pollutants with commercial technology that exists today. We clearly need to do our job better to educate people.

“While some believe [coal’s future] is nonexistent, I believe it is one that is strategic, coordinated, needs to be inclusive and, obviously, responsible.”

Manook said the dialogue between the coal industry and those supporting renewable energy had become exceedingly binary.

“We’re all on the same side. We need an agnostic approach. We need the debate to be agnostic.”

Coal miner Exxaro Resources CEO-designate Dr Nombasa Tsengwa noted that the meaning of a just transition “is to leave no-one behind”.

Council for Geoscience CEO Mosa Mabuza echoed this sentiment.

He said that any just transition must be looked at through the prism of the “poorest of the poor in society”.

He said South Africa had committed to a lower-carbon future on the global stage, but that the country had to find “the appropriate means” to transition from a high- to low-carbon trajectory.

Mabuza believed society needed to have a dialogue on whether this necessarily meant “no coal”.

Minerals Council South Africa Environment, Health and Legacies senior executive Nikisi Lesufi added that it was important that pragmatism prevailed in a just transition, and that South Africa should not compromise its energy, or job security, in moving to a lower-carbon economy.

While the Mining Industry Association of Southern Africa (Miasa) supports the just transition to clean energy, the region must ensure it is pragmatic in its approach, says newly elected president Sokwani Chilembo.

Chilembo is also the CEO of the Zambia Chamber of Mines.

Speaking at an Investing in African Mining Indaba media conference on Wednesday, Chilembo noted that there was a need to ensure the protection of communities’ livelihoods, and that the upscaling of renewable energy had to be “pragmatic” and “carefully considered”.

“We must not leave any of our regional citizens behind.”

Chilembo said the region had recently seen a “very hard stop approach” from the world in its consideration of coal and gas projects – this during a time when Southern Africa’s endowment of the latter was growing.

“This is concerning to us. Access to energy is a key component in improving the quality of live of our citizens. In the absence of energy, people may do what they can, leading to deforestation.

“It is really important that, as a region, we do not lose out on the opportunity to lift enough people out of poverty to a reasonable standard of living, and then become more custodial in our way of thinking.”

Hydrocarbons had to continue to be a key component of energy resilience in the region, emphasised Chilembo.

“As you know, when one area in the region is affected, the Southern African power pool is affected. If we pull a hard stop now, the consequences will be felt across the entire region.”

Chilembo noted that another area of concern for Miasa was persistent allegations around illegal financial flows from, and within the mining industry, and the participation of the corporate mining sector – to the detriment of casting a spotlight on “outright illegal mining”.

“Illegal mining is growing in scale in the region. We are not paying enough attention to this, in preference for the easier story to sell, which is that of persistent corporate malfeasance.”

A third and final concern Chilembo raised was around the recently released Fraser Institute’s Annual Survey of Mining Companies.

This investment attractiveness index “really gave Africa the short end of the stick”, he said, with several African jurisdictions dropping in the ranking, and Morocco, out of left field, popping to almost the top.

Zimbabwe – in Southern Africa – was at the bottom.

Chilembo said Miasa acknowledged the report, but believed that it should be more geographically spread, so that countries which had remained steadfast in their policies were not affected negatively.

He said the report could benefit from being more interactive, cooperative and inclusive, especially as its stature, value and efficacy were highly valued by the mining industry.