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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...

Private equity funds group Appian Capital Advisory has lodged a claim in the High Court of England and Wales seeking compensation from South Africa-based Sibanye-Stillwater, after the miner in January terminated a $1.2-billion transaction to buy Brazilian mining assets.

Appian claimed that Sibanye unlawfully breached two sale and purchase agreements (SPAs) when it failed to close the acquisition of Atlantic Nickel, the owner of the Santa Rita mine, and Mineração Vale Verde (MVV), which owns the Serrote mine.

Sibanye, at the time, explained that it did not follow through on the acquisition of the nickel assets owing to a geotechnical event at Santa Rita, which had a material and adverse impact on the financial conditions, properties, assets and liabilities of the mine.

Appian has disputed this and on Monday reiterated that Sibanye’s assertion that the geotechnical instability constituted a material adverse effect under the terms of the relevant SPA, was incorrect.

“In reality, the event, which Sibanye had previously assessed as an occurrence ‘to be anticipated in mature mining operations’, had minimal impact on the mine.

"Appian considers that Sibanye has improperly relied on the event to avoid its legal obligations and that Sibanye wished to terminate the SPAs for commercial reasons unrelated to the geotechnical event,” the firm said in a statement.

Appian reported that Sibanye's failure to close the transaction and incorrect public statements in relation to the Santa Rita mine had “materially damaged” the market perception of Atlantic Nickel and Appian.

The company is seeking to recover its losses in full.

Sibanye commented that it would defend the claim.

Santa Rita is one of the top ten global producing nickel sulphide mines, producing 16 000 t/y of nickel-equivalent, at a C1 operating cost of $1.97/lb. The conventional openpit operation has a seven-year mine life, but a preliminary economic assessment-stage underground project will extend that to 27 years. Santa Rita has mineral reserves of 43.3-million tonnes at an average grade of 0.31% nickel, 0.11% copper and 0.01% cobalt, containing 134 000 t of nickel, 49 000 t of copper and 5 000 t of cobalt. Its mineral resources contain about 1.38-million tonnes of nickel, 446 000 t of copper and 25 000 t of cobalt.

The Serrote mine has a reserve life of 13 yearsand will produce an average of 20 000 t/y of copper-equivalent at a C1 operating cost of $1.11/lb copper. Serrote has mineral reserves of 50.4-million tonnes at an average grade of 0.6% copper, 0.10 g/t gold, containing 299 000 t of copper and 159 000 oz of gold. Its mineral resources contain about 609 000 t of copper and 347 000 oz of gold.

To reduce barriers to entry, improve the ease of doing business and support transformation of the mining sector, measures are to be implemented to increase rail and port capacity allocation for emerging miners, Transnet announced on Monday.

Improving access to loading facilities, and simplifying the contracting, credit management and capacity application processes are among the initiatives to be undertaken, the State-owned transport enterprise stated in a release to Mining Weekly, after meeting with emerging miners, the Department of Mineral Resources and Energy (DMRE) and finance institutions to present the initiative, which applies to customers in domestic and export coal, iron-ore, manganese, magnetite, chrome and ferrochrome.

A 70:30 split between major and emerging miners is expected from 2027, with the implementation differing corridor by corridor, and the capacity allocation to being phased in.

The minimum requirements for emerging miners to qualify for capacity allocation include:

a valid mining right issued by the DMRE, and validated mining activities;

access to port capacity prior to applying for rail capacity;

access to a siding to accommodate loading of a train; and

minimum credit and legal requirements that take into account the stage of the entity.

Transnet stated that the measures being implementing align with the growth in demand for export capacity for mining products to meet global demand, as well as recent emerging miner growth.

Mining Weekly can report that ten active junior miners last year contributed 3.5-million tons to Richards Bay Coal Terminal (RBCT), short of the four-million tons allocated to emerging miners as part of the DMRE-guided Quattro Scheme Allocation but an improvement on past years.

RBCT itself fell far short of its 91-million-ton capacity in 2021, with its lowest export total since 1996 of only 58.72-million tons. The terminal’s target for this year is 70-million tons.

The biggest challenge experienced as a value chain was receiving coal from the coal mines, with rail delivery being significantly disrupted by cable theft, a challenge coal exporters and Transnet are tackling jointly.

On the manganese front, mining company South32 is assessing the potential expansion and modernisation of rail loading infrastructure at its Wessels manganese mine in the Northern Cape.

Optimum export of metals and minerals is vital for the well-being of the South African economy, which has resulted in the private sector becoming a willing partner in working collaboratively with the public sector to remove obstacles in the way of export opportunities by taking steps to reform the security and upkeep of the vital rail network and avoid losing port business to countries such as Mozambique.

Recent developments in the global energy landscape have seen a rise in environmental, social and governance pressures on coal and calls for an “all or nothing” approach to the long-term future of coal, which coal miner Seriti Resources CEO Mike Teke said is leaving many stakeholders confused.

As it stands, coal still plays a vital role in South Africa’s energy mix and will continue to do so for the foreseeable future.

During the Coaltech 2022 conference on May 27 he asked what would happen if South Africa were to switch off all of its 16 coal-fired power stations. “What will happen to the economy and livelihoods?”

He mentioned that although Eskom had reduced its coal-burning capacity from 125-million tonnes to 104-million tonnes over the last decade, coal-fired power remained a cornerstone of the country’s baseload electricity.

Teke said many international markets had been returning to using coal, or continued to build new coal plants. For example, markets such as Europe, China and India remained major export markets, particularly amid supply chain impacts from the Ukraine war.

The war has also had an impact on coal pricing, along with Covid-19, with the average price for coal having increased in recent months. Teke said this shows the continued value being placed on coal, even amid global downscaling of coal-fired power stations.

“The debate is not about coal versus renewables. We are wrong to think coal will end and all coal-fired power stations will shut down globally. Instead, strategic bold considerations are necessary to mitigate the effects of a massive shift to other energy sources. The Just Transition implies a new chapter, not the end of coal,” Teke stated.

Besides, he added, too many businesses and jobs depended on coal, while South Africa also had too much of this resource to let it simply go unexploited.

He believes coal and renewables could complement each other, to preserve the jobs offered by coal mining, which is a critical factor to consider in the South African context.

“Mining methods may become more digital and mechanised, and clean technologies may enter into the space, but nonetheless coal will remain part of the energy mix.”

Mining Weekly Editor Martin Creamer Hydrox Holdings's advanced alkaline electrolyser; Hydrogen's potential to become a universal energy carrier; and AfriTin's lithium pilot plant in Namibia.

South Africa must reform its regulatory environment and make itself investor friendly – simple.

That is the straight-forward view of Dr Mathews Phosa, who was speaking to Mining Weekly in his capacity as the nonexecutive vice-chairperson of the high-flying Jubilee Metals Group plc, a London Aim- and Johannesburg AltX-listed company that is rolling out an investment of R786-million in South Africa and Zambia.

Mining Weekly has watched Jubilee being built from the ground up in the last 18 years. (Also watch attached Creamer Media video.)

In Zambia, Jubilee 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.

In line with its drive to expand globally, Jubilee on Thursday announced the appointment of new South American-experienced chairperson Ollie Oliveira, as well as key executive committee changes under the leadership of long-standing CEO Leon Coetzer. Oliveira takes over from outgoing chairperson Colin Bird, who will be returning in a special projects advisory role.

To give focus to its global expansion drive, Pedja Kovacevic has assumed the role of chief strategy officer, and Peet van Coller is the new group CFO.

This is the gist of the question-and-answer Zoom interview with the anti-apartheid activist and former Mpumalanga premier.

Mining Weekly: Jubilee is an eye-catcher but South Africa is very badly short of mining companies like Jubilee, which was prepared to launch from small beginnings in 2004 and then grow determinedly for the benefit of all stakeholders. In your view, what lessons can new mining startups learn from Jubilee’s dogged journey?

Phosa: Jubilee was a mere idea at some point. Leon Coetzer and I started with a company called Braemore. We just had an idea which we took to Mintek. You won't believe it. It took eight years of waiting for that idea to be validated. Tells you a story of good leadership, patience, perseverance, commitment, focus and vision. That's what drove us to be able to wait for those eight years and when it was validated with fanfare, we had to go to London in the cold winter to do a roadshow to the big investors, to sell them an idea, a concept. There was no money on the table.

I think the company was only worth R45-million at the time. It was a startup, but we had hope, we had faith and confidence in what we were doing. We were driven by our integrity, honesty, transparency and a willingness to put in as much effort as possible, and to know that no one will get anything for nothing. You need to sweat and toil to create something new for South Africa. There was nothing which you could imitate or emulate. We had to create a new example for South Africa, and today I can say for Africa and for the world.

South Africa is well endowed, but no longer well invested when it comes to mining. You are not only well versed with emerging miners through Jubilee, but you are also very familiar with South Africa’s political and private sector environment. What does South Africa Incorporated need to do to return its minerals potential to far more positive account?

First of all, I need to mention that one of the things we do, which I think government should try and encourage, we build junior miners, black junior miners, and we've built quite a few in the areas where we are in Brits. We're proud of them. We finance them because they don't have capital, but they’ve got assets that need to be monetised. We're doing that to ensure we never run out of feed. We rely on our own feed and the feeds of the small junior miners. I've discussed this with the Minister of Minerals and Energy that unless there's a focus on junior miners, they will not exist. It will just be a pipedream and a good-sounding political speech.

South Africa needs to liberalise its mining environment. There are too many regulatory hoops to jum...

Hydrogen can be transported and stored in existing fossil fuel infrastructure for years if need be, giving it the potential to become a universal energy carrier in the same way as oil is now but without the environmental impact, World Hydrogen Leaders webinar heard this week.

Allowing hydrogen to make use of existing fossil fuel storage and pipeline facilities is the liquid organic hydrogen carrier (LOHC) technology of Hydrogenious LOHC Technologies, which bonds hydrogen to a nontoxic, nonflammable liquid, making it suitable for safe transportation at scale globally, and positions it as the ideal commodity to deliver decarbonisation for the global industry and mobility sectors.

In effect, hydrogen in LOHC form renders renewable energy transportable and tradable on a universal scale.

Storage is often overlooked as an enabler for the whole hydrogen economy, Hydrogenious LOHC Technologies strategy and implementation head Dr Andreas Lehmann said during a panel discussion.

“At Hydrogenious, we have a different kind of storage than you might have in mind possibly, because when we say large-scale or massive-scale storage, everyone thinks of underground storage”, whereas LOHC involves binding the hydrogen to an oil.

“What you get is basically something that is comparable to diesel and oil that can easily be stored and handled at ambient conditions and is also easily transported,” Lehmann emphasised.

“The beauty of LOHC in the end is that it's very comparable to diesel, so everything that works for the fossil fuels we have also works for our LOHC hydrogen.

“That means a lot of infrastructure can be repurposed and when assets already in the field can be repurposed, things just get cheaper and make much more sense, especially if it's the oil infrastructure that’s in less demand if we look into the future.

“Then you can repurpose assets that you have and this is exactly what we're doing, so for us storage is a bit more flexible, because we don't need a geological structure.

“We can store wherever it makes sense. That could be at harbours and at underground and above-ground industrial sites. But, of course, for each of the solutions and technologies, you have upsides and downsides.

“The upside for LOHC is reuse of existing fossil fuel infrastructure.. you can reuse everything that you have for diesel, which makes it simple also in terms of safety infrastructure. You have no upkeep because everything is at ambient conditions, which means you don't have any hydrogen boil off, you don't have any pressurisation, no cooling.

“Basically, you can keep it without upkeep in your storage for months and years if you want, which is another advantage. But, of course, you have some downsides as well as with liquid hydrogen, it needs some energy to release the hydrogen from the LOHC in the end again, so it really depends on your use case.

“If you have very short timeframes, possibly you're better served with gaseous storage. If you have longer timeframes, like months, or you want to transport, then LOHC is your medium of choice and especially if you want your storage at a specific point or location, then LOHC is what helps you along,” said Lehmann.

Hydrogenious is developing supply chains to bring blue and green hydrogen from the Middle East to Central Europe and the idea here is to combine the sourcing of the hydrogen with a storage option – bringing the hydrogen from the Middle East and then being flexible in Europe, “because you can store it, you can transport it onward, or you can release it and put it in a local pipeline or whatever you want”.

That disconnects the timeline from production to use. For transport, crude oil ships, tankers and trucks can be used, making it cheaper through its use of available assets.

Mining Weekly can report that Hydrogenious is being increasingly recognised by investors as being very well positioned to be a critical enabler of global decarbonisation.

For example, in September, the fast-growing cleantech pioneer from...

The Minerals Council South Africa has re-elected Kumba Iron Ore CEO Themba Mkhwanazi, Harmony Gold CEO Peter Steenkamp and Northam Platinum CEO Paul Dunne to serve as VPs for another year.

The council hosted its 132nd annual general meeting (AGM) on May 25, reporting that mineral export sales totalled R841-billion in 2021.

The Minerals Council represents 90% of South Africa’s mineral production by value and is the industry’s primary advocacy organisation.

The council reports that the mining industry’s contribution to gross domestic product (GDP) in 2021 came to R480-billion, or 8.7%, compared with a contribution to GDP of R353-billion, or 7.1%, in 2020.

Mining was one of few sectors to actually create employment in 2021, with 8 000 jobs created during the year.

As of December 31, 2021, 71% of the industry’s 450 000 employees were fully or partially vaccinated against Covid-19.

The Minerals Council said that although production has recovered by 11.2% year-on-year, 2020 was indeed a low-base year and mining production has not managed to recover to the output peaks witnessed between 2000 and 2006.

This is, in part, owing to a lack of exploration and investment in the industry. CEO Roger Baxter confirmed that the council continues to engage with the Department of Mineral Resources and Energy on the draft Exploration Strategy agreed upon initially in January 2021.

Baxter said the council awaits engagement from government on the “final version” of the strategy, as the latest version has not yet been shared with the Minerals Council.

While the positive impact of rising commodity prices benefitted the local mining industry’s performance in 2021, physical volumes of production and exports remain a concern. The council said the longer-term trend was unstable and struggling to break out of its low trajectory.

Mining input costs have also been rising at an average rate of 10% and crept up to nearly 12% towards the end of 2021.

The council pointed to transport and logistics challenges at South Africa’s ports and railways as a dampener of export performance.

On another note, Baxter bemoaned that there have already been 20 fatalities so far this year, adding to the 74 fatalities reported by the mining industry in 2021, and the 60 reported in 2020.

He described 2021 as a year of “regression” with regard to safety, seeing that fatalities had reached a record low of 51 in 2019.

Meanwhile, commenting on Glencore South Africa’s continued membership of the council, given the parent group Glencore’s recent admittance to paying bribes to governments in Brazil, Nigeria, the Democratic Republic of Congo and Venezuela, Baxter explained that it could not apply the principles of its compact to non-member companies, but said it had been in constructive engagements with Glencore South Africa to ensure that its own conduct was above board.

The Glencore group on May 25 announced that it had reached a settlement with various governments related to the bribery allegations.

On energy-related matters, Dunne highlighted that there was a pipeline of 4.2 GW of energy projects lined up in the mining industry, of which many were ready for development once Eskom advances more transmission projects, particularly in the Northern Cape.

Dunne noted that the State-owned power utility would need to balance out the decommissioning of coal-fired power stations with the timeous tie-in of renewable energy projects onto the grid.

It is the Minerals Council’s view that companies are increasingly evaluating the potential of renewable energy projects, and that Eskom must rather focus on optimal management for fewer power stations, and expedite the process to allow supplementary supply to come on stream.

MINISTERIAL VIEW

Mineral Resources and Energy Minister Gwede Mantashe used the council’s AGM as an opportunity to address South Africa’s ranking for the first time among the world’s ten least-attractive mining destinations globally, as per the Fraser Institute Annual Survey of Mi...

Diversified mining and marketing company Glencore on Wednesday announced the settlement of most of its bribery and market manipulation investigations.

This follows almost four years of investigations and a serious environmental, social and governance (ESG) overhang over the group,

Total fines, forfeiture and disgorgement of $1.060-billion will be paid to US and Brazilian authorities and a further, yet to be determined penalty, from the UK Serious Fraud Office will be imposed on June 21, Glencore states in a release to Mining Weekly.

The total is not expected to be more than the $1.5-billion in provisions taken in the 2021 financial results of the London- and Johannesburg-listed company headed by CEO Gary Nagle.

There remains an ongoing investigation by the Swiss authorities for failure to have organisational measures in place to prevent corruption and a similar investigation ongoing from Dutch authorities.

These investigations are not included in the provision and remain outstanding. To settle with the US Department of Justice, the group has pleaded guilty to one count of conspiracy to violate the US Foreign Corrupt Practices Act related to past actions in overseas jurisdictions and pleaded guilty to one count of market manipulation in the US fuel oil markets. Glencore has also settled related civil violations of the Commodity Exchange Act and CFTC regulations. Finally, it has settled with Brazilian authorities for its part in the Petrobras “Operation Car Wash scandal”.

An independent compliance monitor will be put in place for three years to assess Glencore’s compliance with the agreements and to evaluate the effectiveness of its internal controls. Glencore has also released a presentation on its ethics and compliance programme outlining the changes to business practices that have now been in place since prior to the investigation, changes to management and its compliance and system procedures which have been increased significantly since 2016.

As a public company, and especially with new management at the CEO level and at each of the divisions, Glencore is of the view that it has already moved on from its past.

It states in the release that it will continue to operate in challenging jurisdictions, where risks from various legal regimes will remain, but adds that the lessons learnt from this, both from a monetary perspective but more so from the ESG implications the company has faced for the last few years, are not likely to be soon forgotten by management.

It points out that its trading business is now much more reliant on its own infrastructure and long-term partnerships for profitability than it was ten years ago. It thinks this, and a wider cultural shift around marketing’s place within a public company, makes the risks around new fines or investigations low.

The total amount of $1.06-billion could mean that the final cost comes in less than $1.5-billion provisioned.

“We also think that the market’s reaction to the provision at the full year results moderates the impact of today’s news. This said, today should remove most lingering concerns and take off the table any worries around any material impact to the ongoing business/forced divestments and or any criminal sentences. Therefore we view today’s release as a positive,” the company states.