National mineral research organisation Mintek will be providing new services to the gold mining and exploration sector.

The organisation announced on March 7 that it would be providing oxygen demand and Knelson extended gravity recoverable gold (EGRG) testing services.

To facilitate these new services, Mintek has acquired an MD3 Knelson concentrator, which is a type of gravity concentration apparatus used for the recovery of fine particles of free gold without the need for gold cyanidation for recovery.

“We have received a number of requests for Knelson gravity work, as well as oxygen demand work, highlighting the need for these services,” said Mintek hydrometallurgy senior engineer Bongiwe Nkabane.

She said Mintek was at the development stage of conducting testing and validation of the Knelson EGRG.

She explained that the objective of the testing was to quantify the amount of EGRG that can be recovered from the ore.

Nkabane said the setup for the Knelson EGRG circuit consisted of a rod mill, a screen and the Knelson concentrator. The test was being carried out in three concentration stages, where each stage was preceded by grinding to a specific grind size. The grind size was progressively reduced as the stages progressed.

The concentrate of each stage was then analysed for gold and particle size distribution. The final tailings were also analysed for gold.

“The benefits compared to the gravity amenability testing equipment that we have is that the progressive grinding minimises the over-grinding of particles and smearing of coarse precious metals. Moreover, the liberation characteristics of the EGRG can be obtained from the test,” she explained.

She said the data acquired from the testing could be used to model, upscale and predict the performance of gravity circuits.

Nkabane requested gold mining and exploration companies to contribute further to the test work by contributing more samples for testing.

OXYGEN DEMAND TESTING

Mintek has also acquired oxygen demand testing equipment with the aim of quantifying ore oxygen requirements.

Nkabane said the sizing of oxygen plants for gold cyanidation plants remained problematic owing to the poor quantification of ore oxygen requirements.

To address this problem, Mintek entered into a service agreement with gas services and equipment provider Air Liquide to house oxygen demand laboratory equipment to be able to provide oxygen demand testing services to the industry.

“The main information acquired from this test is the oxygen uptake rate and the oxygen uptake efficiency. In addition to this, you can get the gold extraction efficiency, the gold dissolution rate, as well as the lime consumption,” Nkabane explained.

Currently, Mintek is busy with training personnel in collaboration with Air Liquide to use the equipment and interpret its results accurately. The commissioning and testing of the equipment still needs to be carried out.

Nkabane extended a plea to the gold mining and exploration industry to provide samples and plant data to help expedite the test work, which she said would begin within the next three months.

“To make this service available we need cooperation between the mining houses and Mintek during testing and validation,” she said.

Mintek expects both the Knelson EGRG and oxygen demand testing services will be commercially available to the industry within six months.

Diversified mining company African Rainbow Minerals (ARM) has reiterated its commitment to transitioning from coal to renewable energy, with its executive chairperson Patrice Motsepe describing the global commitment to the green economy as being not only important but crucial.

Motsepe was speaking against the background of coal contributing an increased R351-million to ARM headline earnings of R3.7-billion in the six months ended December 31, well up on the R222-million headline loss in the corresponding period of 2021 and representing 8% of earnings before interest, taxation, depreciation and amortisation (Ebitda). Significant combined contributions from platinum-group metals (PGMs) and iron-ore made up 88% of ARM’s Ebitda in the half-year.

“Coal has done reasonably well, but we are also committed to the transition from coal to renewables,” Motsepe said during ARM's presentation of half-year financial results covered by Mining Weekly.

“What we’ve said globally, and I have been part of discussions at the highest levels in the world, is that the commitment to the green economy is not only important, it’s crucial.

“What is indeed important is that the transition must be a responsible and carefully planned transition that creates new jobs in the new economy, the economies of the countries and in the companies that are part of the minerals that are under purview in relation to their negative impact on global warming and climate change.

“Coal will continue to be an important part of the South African economy as part of the transition. There are no easy discussions as to how long the transition will take, and we will play our role in terms of making sure that African Rainbow Minerals is in line with the commitments of all of us globally, to climate change and to protection of the environment, society, and the globe overall,” said Motsepe, who expressed pleasure at signing the agreement to acquire Bokoni Platinum Mine for R3.5-billion in cash. ARM’s group net cash rose 35% to R11-1-billion in the period.

ARM has invested a lot in manganese and expressed confidence that in the medium term, manganese would continue to be a significant contributor to Ebitda, headline earnings and profitability.

ARM displayed a slide to emphasise the importance of the Bokoni PGMs transaction, and described it as being part of his JSE-listed company's growth in the short-, medium- and long term.

“The developing of the mine will allow us to scale our PGMs portfolio and create value for shareholders and other stakeholders,” Motsepe said in declaring a 20%-higher interim dividend of 12c a share.

The mine, which has not been operational, is viewed as an exciting opportunity for ARM.

“We’re excited and committed to growing Bokoni in the medium term,” said Motsepe, with ARM ultimately poised to own 85% of Bokoni mine, with communities, employees, and industrialists each owning 5% acquired at a nominal price.

“You cannot be a globally competitive company unless you pay consistent, competitive dividends, as well as indicate a track record of growth.

“We remain committed to paying competitive dividends while pursuing value-creating growth,” he added. ARM’s PGM assets contributed R1.2-billion to overall headline earnings in the period.

ARM’s PGM assets continue to display growth, and iron-ore and manganese continue to play a strategic role. PGMs contributed 46% to Ebitda in the period, iron-ore 42%, and manganese 10%.

“What we’ve said over the last 20 years is that we will grow the PGMs, but side-by-side with that, we will also grow the iron-ore and manganese. Over time, the plan is that the iron-ore and manganese should continue to be a strategic part of our long-term future, but the PGMs will grow significantly in terms of our plans and specifically the Bokoni transaction, and other opportunities that we’re looking at, so that we can get the full benefits of being a diversified mining company,” Motsepe said.

In addition to the acquisitive Bokoni growth project...

The bottlenecks in South Africa’s export corridors – caused in large part by State-owned logistics company Transnet’s inability to provide sufficient capacity – would likely undermine any opportunities that could arise from commodity supply shortages and higher prices as more sanctions are implemented against Russia, financial services provider Sanlam Investments equity analyst and fund manager Andrew Snowdowne told Engineering News on March 4.

Following Russia’s invasion of Ukraine on February 24, sanctions have now been imposed on Russia by the European Union, the UK, the US, Canada, Australia and Japan, while certification of the Nord Stream 2 pipeline project has been suspended by Germany.

Prior to the invasion, Russia provided more than 10% of the global supply of palladium, natural gas, gold, oil and coal. Much of this will now need to be sourced elsewhere, with South Africa potentially in a position to fill the gap if it could only get product out of the country.

“We're not in a position to necessarily take full advantage of the situation because of Transnet’s infrastructure problems and inefficiencies. It’s a very sad situation,” Snowdowne said.

He noted that, for now, there was much speculation and little certainty owing to the rapidly changing situation in Ukraine. Although supply chains appeared to be relatively unaffected for the time being, he said it was definitely not “business as usual”.

Snowdowne explained that geopolitical events typically impact commodity supply more than demand.

Sanctions are not currently targeting commodity flows and, in Sanlam’s view, are unlikely to do so directly, owing to the current power situation in Europe, the broader inflation backdrop and the market dislocation that followed 2018 sanctions on Russian aluminium producer Rusal.

Nevertheless, Snowdowne said there was the potential for exports from Russia to be disrupted by either indirect effects or by Russia’s own choice to restrict exports.

He said that recent history of geopolitical events suggested that the effects on markets are unlikely to be persistent because they do not change the underlying economic realities. Snowdowne said this may well be the case again, but the potential for a significant negative commodities supply shock creates the risk that “this time it’s different”, and that prices might rise sharply to reflect a risk premium.

“This should of course be very bullish for commodity prices, against a backdrop of broadly tight supply-demand balances. However, one should be cognisant that the follow-on impact of dramatic cost-push price inflation, is demand destruction,” he noted.

Snowdowne said a marked intensification of an upward trend in commodity prices had occurred over the past six weeks, as persistent physical demand was reinforced by investors searching for inflationary hedges.

“When played out against the background of lingering production disruptions due to Covid-19, supply chain dislocations and limited supply growth, the result has been a powerful uplift for commodities as an asset class,” he said.

POSITIVE DRIVERS

Beyond geopolitical factors, Snowdowne noted that there were several positive drivers for commodities.

The first of these was general under-investment. He said that a period of substantial over-investment and poor capital allocation between 2007 and 2011 was followed by lower capital expenditure and increased shareholder distributions.

Moreover, the cost of capital is now also higher owing to environmental, social and governance concerns.

The second driver was demand recovery post Covid-19.

“We expect the impact of an end of destocking and significant restock to drive demand for many commodities to levels higher than many expect – most notably in the platinum group metals as the semi-conductor shortage in the automotive sector continues to normalise,” Snowdowne said.

Thirdly, commodities have historically been an effective hedge against inflation, although many surveys suggest investor alloca...

As pressure mounts for the world to align meaningfully with the 1.5 °C global temperature rise scenario, decarbonisation is standing out as a key driver of metals and mining value.

“This has strengthened our view that the mining industry now has a clear pathway towards long-term transformative demand, encapsulated by energy transition,” said Wood Mackenzie Metals and Mining Markets head Derryn Maade during the research company’s Future Facing Mined Commodities Forum webinar covered by Mining Weekly.

“This presents a fascinating dynamic to sector players, and we expect capital allocation will shift further to take advantage of a much anticipated super cycle in green energy materials,” said Maade who described the rising demand trend facing metals and mining as being unstoppable as pressure mounts for the world to align meaningfully with the 1.5 °C global temperature rise scenario.

Wood Mackenzie Metals and Mining VP Robin Griffin said extraordinarily strong metals prices had exploded into 2022 after a very solid 2021.

“We’ve got base metals at somewhere between 30% and 60% above where they were pre-pandemic. For battery raw materials, it’s more like 300% and 500% above where they were and even bulks have been joining the party at two-and-a-half to three times where they were. Obviously, that has created enormous margins,” said Griffin.

“When we look at where prices are today there are very unique circumstances that are playing a role on top of undoubtedly the energy transition premium that is being paid. There are things like pent-up demand from the pandemic, which hugely stimulated the economy.

“A lot of restocking, some hoarding and particularly supply chain issues, which have lingered even whilst the economic recovery has taken hold, and that has really super-charged pricing, and is a very important part of why we are seeing prices where they are.

“So, super cycle, yes – but not quite. When you look beyond 2023, at 2030, for instance, those sort of structural demand issues relating to the energy transition really start to have an effect,” said Griffin.

“Apart from iron-ore and thermal coal, there are very positive demand outlooks across the metals and mining space. Across base metals, battery materials, rare earths, there is universal growth. In absolute volume terms, it is much smaller than the kind of changes that we might expect to see in bulks.

“But when you look at it in terms of the size of the market, which is more important from an investment perspective, the changes are really quite exciting. The types of growth that we’re going to see to 2030 is 15% for lead/zinc, and 20% for aluminium, just below 40% for nickel, 17% to 18% for rare earths and graphite and a tripling of the lithium market,” Griffin outlined.

“That kind of growth, we think, is going to create some major challenges for miners. Certainly, we don’t think there are enough committed projects in the pipeline to meet the demand,” he added.

Additional commitments need to be made to deliver five-million tonnes of aluminium, five-million tonnes of copper, 400 000 t of lithium and 40 000 t of cobalt.

“So, really quite significant. It doesn’t mean that this supply gap will exist in 2030. What we’re saying is that investment needs to ramp up, and we’re looking at about $200-billion of additional investment that would get us to where we need to be.

“Reticence is understandable from an investment perspective. These markets are very volatile, they’re uncertain, and so we can understand that certain miners may not wish to dive in with both feet, but something has to change because we’re in 2022 and 2030 is really just around the corner, particularly when it takes typically ten years to bring on new greenfields suppliers – and, of course, I’m talking about the base case,” Griffin said.

This week, Mining Weekly Editor Martin Creamer discusses decarbonization; Zimplat’s 185 MW solar approval; and whether the supply of platinum group metals could be impacted by Russia’s invasion of Ukraine?

JSE-listed diversified resources group Exxaro Resources has declared a total ordinary dividend for the 2021 financial year of R32.52 apiece, up 72% compared with the prior year.

Outgoing CEO Mxolisi Mgojo attributes the group’s solid performance to a committed delivery of strategic priorities and the company having taken decisive action in a dynamic environment.

Some logistical challenges, including rail capacity constraints, persisted throughout the financial year under review and continue to impact on coal volumes currently.

Exxaro recorded a 37% decline in its export coal volumes to 7.6-million tonnes for 2021, owing to logistics constraints.

Incoming CEO Nombasa Tsengwa expects these challenges to continue throughout this year, but affirms that discussions are under way, at industry level, with Transnet to resolve the rail challenges.

She says the challenges experienced by Transnet Freight Rail are systemic in nature and require a concerted effort, together with government, which will take time.

Marketing manager Sakkie Swanepoel elaborates that sabotage, cable theft and vandalism along Transnet’s rail lines increased over the last few years and that this requires “a lot of support and effort from the private sector and government”.

“The availability of locomotives is also an issue. Transnet has not been able to procure the necessary spares, owing to legacy issues. The State-owned freight utility is trying to retrofit spares on those locomotives that need components.

“Transnet is also embarking on a programme to source local suppliers for some of these spares, which takes time. We are hopeful that towards the end of the year we should see good progress on those fronts,” he notes.

Meanwhile, market fundamentals for coal remained strong for most of 2021. Mgojo notes that the coal price declined towards the end of the year and resulted in Exxaro’s export price achieved averaging $124/t in 2021.

Tsengwa points out that Exxaro could not fully capitalise on the healthy demand for its suite of products and the high thermal coal price as a result of the railway issues.

However, strong commodity prices nonetheless supported a 46% year-on-year increase in Exxaro’s core earnings before interest, taxes, depreciation and amortisation (Ebitda) to R10.7-billion.

Net operating profit totalled R9.7-billion for the year, compared with net profit of R4.8-billion for 2020.

After adjusting for noncore items, core headline earnings per share (HEPS) amounted to R46.83 for the year under review, compared with core HEPS of R29.73 for 2020, which was partly owing to a decrease in the weighted average number of shares to 247-million, after Exxaro undertook a R1.5-billion share repurchase programme.

Tsengwa mentions that the company achieved a record fatality-free performance of five years and achieved a lost-time injury frequency rate of 0.08.

The company continues with its portfolio optimisation, the value maximisation of its coal assets and pursuing opportunities in the low-carbon transition.

To this end, Exxaro is aiming for a 40% reduction in Scope 1 and 2 emissions by 2025 and maintains its leading environment, social and governance (ESG) rating on the Financial Times Stock Exchange Group Russel ESG Index.

Exxaro is planning to develop renewable energy generation capacity at all of its mines, which will comprise 200 MW of developments.

Mgojo will be retiring in July and tells Mining Weekly he will endeavour to remain involved in the mining industry after taking a break to spend time with family.

COAL

Coal production volumes across all Exxaro mines (excluding buy-ins) decreased by 10% year-on-year to 42.2-million tonnes, mainly owing to the impact of the logistical and market constraints, as well as the company selling its Exxaro Coal Central noncore operation.

Coal revenue increased by 13% year-on-year, largely driven by an increase in revenue from its commercial mines as higher sales prices were achieved in all markets.

Higher domestic sale...

The decarbonising of the global economy to prevent climate change is going to create the greatest investment opportunity of our lifetime.

It will also leave behind the companies that do not adapt – regardless of what industry they are in.

Sibanye-Stillwater CEO Neal Froneman on Thursday quoted these words of Blackrock CEO Larry Fink.

“I think Larry Fink is spot on,” said Froneman after the presentation covered by Mining Weekly that highlighted a stunning set of record-breaking financial results and the declaration “class-leading” dividends. The Johannesburg- and New York-listed company had R11.5-billion net cash in hand as of December 31.

Being a force for good is central to the enhanced strategy of Sibanye-Stillwater, which has already made considerable progress on its own journey towards carbon neutrality, with one solar project in the bag and a total renewables portfolio of 557 MW of solar and wind energy on the way.

building a green metals portfolio is based on its strategy of building a climate-change resilient business.

Battery metals, together with the platinum group metals, are poised to provide significant green metals portfolio, which already take in investments in lithium and nickel producing concerns.

Sibanye-Stillwater intends to complement that with other metals such as copper, perhaps manganese, and uranium, which is a by-product of the gold it mines.

As it increases its exposure to the circular economy, it has advanced its thinking on recycling as well as on mine waste retreatment.

Sibanye-Stillwater energy and decarbonisation head Jevon Martin said as a force for good, Sibanye-Stillwater had a role to play in the urgent global response to the threat of climate change.

“As such, we have aligned our governance strategy and risk management and targets across the group to align with the Task Force on Climate Financial Disclosures,” said Martin

First and foremost, green metals are produced that support the reduction of greenhouse gases and the reversal of climate change.

Through the introduction of demand-side energy management, renewable energy, electrification, and fuel switching opportunities, including green hydrogen, it believes it will be able to demonstrate an active decarbonisation pathway, which will be converted internal annual carbon budgets to inform the long-term incentive plan.

Recognising that there will be hard-to-abate emissions towards the end of its carbon neutral journey, a carbon offset strategy has been compiled to generate the required offsets to neutralise the remaining emissions.

Combining these elements presents a definitive pathway through to carbon neutrality supported by internal carbon budgets to drive decarbonisation and deliver on commitments.

Due to the infrastructure and extensive energy requirements of South African operations, combined with the carbon intensive electricity supply from Eskom, 93% of the company’s greenhouse gas emissions emanate from grid supplied electricity.

“Eskom also continues to pose a risk to our business through above inflation tariff increases and unreliable electricity supply.

“The extensive electrification of operations, however, presents an opportunity to mitigate these risks and accelerate decarbonisation through the deployment of renewable energy,” said Martin.

Relaxing of regulatory requirements and anticipated ability to trade electricity in South Africa, has allowed Sibanye-Stillwater to grow its portfolio of renewable projects to 557 MW, including solar and wind projects.

A local project developer has been appointed to provide 50 MW of solar photovoltaic electricity to its South African gold operations as well as two local project developers for three shovel-ready wind projects across South Africa.

Progress has also been made in the permitting and consents required for a solar project at South African platinum group metals operations.

“These projects have been structured to limit capital outlay whilst enabling significant decarbonisation and s...

Trade union Solidarity says it has informed precious metals miner Sibanye-Stillwater that it accepts the company’s latest offer of a 5% wage increase for members employed at Sibanye’s South African gold mines.

According to Solidarity, acceptance of a 5% increase means that Solidarity and its members are no longer in dispute with the company.

Solidarity emphasises that it is a member organisation and acts in accordance with the mandate from its members, despite the unease it may create among other parties.

“After a confidential voting process had taken place, an overwhelming majority of Solidarity’s members accepted the final offer of 5% and, on the basis of the members’ mandate, Solidarity had to withdraw from the dispute process and did not participate in the joint union vote to strike,” Solidarity Mining, Agriculture and Chemical Industry deputy general secretary Riaan Visser says.

Solidarity and three other mining unions have been in dispute with Sibanye’s Gold division over the proposed wage increase since December 2021.

Sibanye and the unions met again on February to try to resolve the dispute and Sibanye revised its offer to a 5% increase for miners, artisans and officials and an increase of R800 (including an additional R100 housing allowance) for Category 4 to 8 employees for the next three years.

“The bid to find consensus between parties is always at the heart of labour relations. Solidarity’s approach is always to find common ground instead of acting hostile towards other parties.

“We are satisfied with the offer and are happy that we could negotiate this increase for our members,” Visser concluded.

The other unions have, meanwhile, resolved to embark on a strike at Sibanye’s gold mines.

Sibanye tells Mining Weekly that the other unions have just completed a balloting process overseen by the CCMA, and would inform the company of the outcome on March 4.

In response to JSE- and NYSE-listed precious metals miner Sibanye-Stillwater backing out of its acquisition of the Santa Rita nickel and Serrote copper mines, in Brazil, the seller Appian Capital has served Sibanye with a notice of claim for what it says is the unlawful failure to close the acquisition.

The acquisition would have involved Sibanye acquiring Atlantic Nickel and Mineracao Vale Verder, the operating companies of the mines, for $1-billion and a 5% net smelter royalty to Appian over future production.

While Sibanye cited its reason for the termination of the acquisition as being a geotechnical event at Santa Rita having a material and adverse impact on its financial conditions, properties, assets, liabilities and operations of the mine, Appian says the instability had minimal impact on the mine and these types of occurrences are expected in mature mining operations.

Appian elaborates that the geotechnical instability – which was a crack that formed a wedge-shaped rock mass – affected less than 1% of the total surface area of the openpit mine and points out that daily ore mined continued to exceed levels of daily ore mined before the event.

The mining investment firm adds that there is no impact on the openpit mine, nor any expected loss of ore within the openpit reserve.

Besides, Appian argues, the area where the event occurred will be fully mined out during the second half of this year, at which point the instability will no longer exist.

Appian notes this in response to Sibanye alleging that the instability reduces a six-year mine life by two to three years.

“Sibanye’s actions have exaggerated the effect of the geotechnical instability and have materially damaged the market perception of Atlantic Nickel and Appian,” the firm states.

It says Sibanye purports to rely on alleged adverse impacts of this geotechnical instability to terminate the sale and purchase agreements, adding that Sibanye intentionally chose to breach its obligations for commercial reasons alone.

“Appian intends to rigorously enforce its legal rights and pursue Sibanye for all damages and losses incurred,” the firm concludes.

The energy transition is highlighting mining as an indispensable industry, said Responsible Mining Foundation (RMF) CEO Hélène Piaget in opening a webinar on 'Responsible Mining Index (RMI) Report 2022', which reports a slowdown in economic, environmental, social and governance (ESG).

“Yet there is a constant tension between society’s need for the products of mining and the harmful impacts that mining can and does cause. So society finds itself in a constant conflict of conscience when it comes to the mining industry,” said Piaget.

The RMI Report 2022 measures how a sample of mining companies are responding to the ESG expectations of society.

“But the same companies, who can show that they are making some progress on ESG policies and procedures, could at the same time, be a company that causes harm to people and environments in any number of ways. This is a contradiction that we have in trying to encourage continuous improvement,” said Piaget, who added that the reason why the RMF and many others were working to normalise responsible mining was exactly because of the potential harm that mining could cause.

The webinar, covered by Mining Weekly, was moderated by Synergy Global Consulting director Ed O’Keefe and participated in by International Council on Mining and Metals CEO Rohitesh Dhawan, IndustriALL Global Union mining director Glen Mpufane, Publish What You Pay executive director Elisa Peter, Polymetal company secretary Tania Tchedaeva and Triple R Alliance director Luc Zandvliet.

The report is described as an evidence-based assessment of 40 large-scale mining companies and 250 mine sites operating in 53 countries. These companies together represent about 30% of global production.

These listed, private and State-owned entities are responsible for about 1 000 operational and closed mine sites, with the report providing a snapshot of how the industry is progressing and the gaps that still require more effort, both at the corporate level and at mine sites, where harm prevention and risk limitation are regarded as being essential to responsible mining.

“Mine sites matter as this is where most salient harm can happen to people and environments, where the impacts of climate change are evident, so it is important to observe whether the company systems are, in fact, being implemented as intended, at the operations,” she said.

Schematic areas covered by RMF include economic development, business conduct, life-cycle management, community well-being, working conditions, and environmental responsibility, with cross-cutting issues including human rights, gender, harm prevention and climate change.

The results, as an overall observation, show signs of continuous improvement.

“Things are moving in the right direction, although with some slowing down now in 2022,” said Piaget.

The overall results for 2020 showed an average increase of 16% on a previous report, and the 2022 report now shows an increase of 11%.

Given the fact that most companies had shown strong profits, one could not ascribe the slowdown to the pandemic alone.

“We do have questions to ask about the slowing down,” she said.