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Dubai-headquartered copper and cobalt miner Shalina Resources and its subsidiary Chemaf have signed a financing and marketing agreement with commodity trader Trafigura.

The deal will facilitate new supply of high-grade cobalt hydroxide and copper cathode at a time of growing global demand.

Trafigura will syndicate about $600-million of financing to international banks, as well as market all of the cobalt hydroxide produced from the companies’ assets in the Democratic Republic of Congo (DRC).

The financing will enable Shalina to complete the construction of its fully mechanised Mutoshi mine and solvent extraction and electrowinning processing plant, in Kolwezi, as well as progress the expansion of the Etoile solvent extraction and electrowinning processing plant, in Lubumbashi.

An important component of the transaction involves Trafigura working with Shalina and Chemaf to enhance the management of social and environmental impacts of the operations, in line with international standards – including the Organisation for Economic Cooperation and Development’s ‘Due Diligence Guidance for Responsible Supply Chains’ and Trafigura’s own responsible sourcing programme.

The Mutoshi mine is set to be one of the largest copper and cobalt mines in the DRC with significant resource upside. The mine is expected to start production by the third quarter of 2023.

Since announcing plans to build a green ammonia export plant in Nelson Mandela Bay, the partners behind the project, Hive Hydrogen, Built Africa and Afrox subsidiary Linde, have witnessed a great deal of interest in this first-of-its-kind undertaking.

The R75-billion project heralds a new area for South Africa in its commitments to greener solutions for industry, particularly as the world is starting to feel the pressure to meet net-zero targets by 2050.

Notably, Hive Hydrogen South Africa chairperson Thulani Gcabashe says the support the project received so far stems largely from Transnet, Eskom, the local government of Nelson Mandela Bay and international industry partners. The proposed up to 900 000 t/y green ammonia plant – with its own dedicated green power supply at the Coega Special Economic Zone alongside the Port of Ngqura – is a significant South African response to the world’s need for green solutions to limit the devastating impact of climate change and to deliver on COP26 commitments.

The developers state that the renewable energy and energy storage component of the project alone will be the biggest of its kind in sub-Saharan Africa and one of the largest globally.

The project will be powered by a 1 000 MW solar plant, located adjacent to the plant, coupled with a 56 MW battery storage component on site, and a 1 400 MW wind farm, which will be built further away.

Gcabasha notes there is a surge in demand for ammonia globally, to meet agricultural, chemical and mining requirements. This, coupled with the expected global switch to green ammonia as the main fuel in the maritime industry, and its ability to serve as a coal substite, makes this the optimum time to invest in this commodity.

Hive Hydrogen in December last year published a prefeasibility study on the project and has been working towards a final investment decision. A full feasibility study is in progress and, thereafter, the project team aims to garner funding support.

The company expects the plant to be fully operational by 2026.

Hive Hydrogen UK founder and CEO Giles Redpath explains that, if by the end of the century nothing has been done to mitigate climate change, and a 5 ˚C temperature rise is not curbed, human life will not be supported and harsh weather conditions will ensue.

He highlights the importance of using South Africa’s renewable energy resources, not only for the benefit of the local economy, but also to position it as a leader in mitigating climate change concerns. He highlights South Africa’s abundant wind and solar resources as an advantage.

“This project is incredibly important . . . ammonia is important because it can be transported in ways that hydrogen cannot,” he says.

Elaborating further on the benefits of this clean fuel, Gcabashe says ammonia can be liquefied, stored and transported, which many other forms of renewable energy cannot. He adds that ammonia is burned with internal combustion engines, with no carbon emissions as a result; it can be converted to electricity directly, or provide hydrogen for fuel cells.

Transnet National Ports Authority will provide storage tanks for the ammonia to be stored pending export.

Although this is a complex ammonia production project, and a first for South Africa, it will be catalytic in terms of post-Covid-19 recovery. The project can be a huge boost for business confidence and present supply chain opportunities, as well as major foreign direct investment opportunities, states Gcabashe.

The project is poised to create thousands of jobs, should it come to fruition.

But beyond job creation, this project, being located where it is, could result in that area becoming an energy hub for renewable energy, notably for hydrogen.

“Our immediate priorities are to create a bankable project within 18 months, to find funders, and execute the project on time and on budget.”

JSE-listed platinum group metals (PGMs) miner Impala Platinum (Implats) issued an offer circular to shareholders of midtier PGMs miner Royal Bafokeng Platinum (RBPlat) on January 17 proposing to acquire all RBPlat shares it does not already hold.

As at January 7, it held 102.05-million RBPlat shares, representing about 35.31% of the shares in issue.

Implats is offering RBPlat shareholders R90 in cash and 0.3 of an Implats share for every RBPlat share held.

Implats CEO Nico Muller says the proposed acquisition of additional RBPlat shares will provide a structure that offers “compelling strategic, operational and financial benefits for all Implats and RBPlat stakeholders [as] it secures a western limb of the Bushveld Complex’s production base that enhances and entrenches the region’s position as the most significant source of global primary PGMs production.”

He adds that the acquisition will also deliver “tangible” socioeconomic benefits for the region, its communities and South Africa as a whole, including employment security and sustained indirect benefits for the greater Rustenburg region.

In a statement, Implats says the offer provides a “compelling” value proposition for RBPlat shareholders by “crystallising inherent equity value at an attractive premium” through the receipt of a combination of cash and high-quality and liquid scrip in Implats.

This, in turn, offers exposure to a global portfolio of PGM assets, projects and a toll refining business, which Implats says is well-positioned to capture the benefits of the full PGMs value chain through integrated processing facilities, including wholly-owned smelters, as well as base and precious metal refineries.

It also offers an opportunity to benefit from regionally-diverse production growth across shallow, mechanised operations on the eastern limb of the Bushveld Complex, Canada and Zimbabwe and the planned expansion of installed processing capacity.

Implats further adds that the offer avails the “best position” to deliver future operational benefits of significant, unique regional synergies presented by these contiguous operations. This is because of Implats’ comprehensive experience of the orebody and its ability to leverage cost-effective opportunities for future growth, it states.

Further, the offer provides an “attractive and sustainable” dividend yield, underpinned by clear and disciplined capital allocation priorities and a strong and flexible balance sheet.

“Our value-focused strategy is to increase exposure to low-cost, shallow, mechanised assets; enhancing the positioning of the Implats group with a quality portfolio of high-value operations that are sustainable and competitive through the cycle,” says Muller.

He adds that the level of ownership in RBPlats achieved by Implats to date is indicative of the broad support it has received and affirms the strategic rationale and value proposition provided by this acquisition.

The offer will be open for acceptance from 09:00 on January 17 to 12:00 on June 17.

Implats and fellow PGMs miner Northam Platinum have both made a play for RBPlat.

In November last year, RBPlat shareholder Royal Bafokeng Holdings accepted an unsolicited offer for up to a third of RBPlat shares in a R17-billion transaction.

Further, RBPlat in December announced that it had received an unsolicited approach from Northam regarding its interest in acquiring all, or a portion of, the voting securities of RBPlat. At the time, RBPlat said its independent board would deliberate on the approach.

West Wits Mining, the Australia-listed Witwatersrand gold reviver that is advancing fast on an initial A$9.5-million capital raise, is the beneficiary of an unexpected gold find that will result in income being generated considerably sooner than expected.

From next month, West Wits Mining, headed by MD Jac van Heerden, will begin turning valuable vamping material to account that nobody knew was there. (Also watch attached Creamer Media video.)

The vamping material escaped the attention of the definitive feasibility study (DFS) because entry of the dormant section of the Rand Leases and DRDGold that closed a couple of decades ago was still unsafe at the time.

But that all changed in November and December when a ventilation system was installed, the underground made safe and the ready blasted vamping material came into view.

“It was a nice surprise for us,” an upbeat Van Heerden told Mining Weekly in a Zoom interview.

Grab sampling showed that the material had an average grade in line with expectations and income generated will help to cover overhead costs.

That will happen ahead of the company getting stuck into the in situ orebody in March/April, when it will commence blasting and extract face rock.

Following the granting of the mining right and completion of the Qala Shallows Stage 1 DFS in the third quarter of 2021, West Wits has rapidly advanced site establishment, mine development and the early mining initiative at its Witwatersrand Basin Project that highlights the huge potential of South Africa to begin turning its rich legacy resources to positive account.

The underwritten rights issue to fund the project was fully underwritten by Evolution Capital.

The company has also completed a share placement on an unrelated investor to raise a further A$1.6-million and has appointed South Africa-rooted Taurum International to raise debt.

The compliant resource estimate of the Witwatersrand Basin Project has hit the 4.28-million ounces mark at a grade of 4.58 g/t of gold.

“That’s quite an exciting grade for us,” said Van Heerden, who described the orebody as strong and the growth potential as considerable.

The Qala Shallows area is where the DFS was finalised last year. There the grades are still at the 3.5 g/t or thereabouts. That is also the 500 m area where mining will start first and where the DFS declared a reserve of about 288 000 oz, a number that is poised to remain until further feasibility studies are completed this year.

With the mining of the vamping material and old available faces due to begin next month, rock engineering and ventilation teams are going all out to identify rock conditions and ventilation requirements to ensure that the reviving operation is in a position to start taking up ore from February/March onwards.

“We estimate that, at least for the next six months, we’ll be in a position to take out about 5 000 t to 8 000 t a month and as we understand the available faces a bit better, we’ll then extend that plan going forward.

“Our DFS project, as we call it, was only really scheduled to click in from about September this year, so what we’ve managed to do with what we call the early mining initiative is to bring quite a bit of activity forward.

“We’re in a position to prove to people that the gold is there and we’re funded for this year to start this early mining. We’re still working on our debt funding initiatives as well and at least for the next six months or so we’re are funded to start our early mining initiative,” Van Heerden enthused.

West Wits has appointed Modi Mining as its mining contractor. Modi states on its website that it is led by Motlapele Molefi, with entrepreneurial prowess derived from years of building successful enterprises through consulting and advisory, and mining engineer Sam Molefi, with a 20-year career in the mining and explosives.

When an output of 50 000 t/m is attained, the company expects to have created about 600 to 700 jobs.

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JSE-listed ferrochrome producer Merafe Resources reports that it and Glencore Operations South Africa have reached an agreement to contribute to the Glencore-Merafe chrome joint venture (JV) a new platinum group metal (PGM) production plant that is currently being built at the Kroondal mine.

The new PGM plant’s main operations will be the treatment of PGM-bearing material derived from the mining operations at the JV’s western chrome mines, as well as that available in applicable tailings facilities and dams.

Merafe Resources FD Ditabe Chocho tells Mining Weekly Online that the PGM concentrate to be produced at the plant is an associated minerals concentrate from the JV partner’s production of chrome ore.

He adds that the plant is expected to be completed this year, and that because it is being built in phases, it enables the JV partners to currently produce concentrates even through it is still under construction.

It will also treat PGM-bearing material from certain mining operations in the vicinity of the Kroondal mine to which Glencore South Africa and/or Merafe directly or indirectly have rights in relation to PGMs.

“The cost of the plant will be financed from our cash reserves and will be disclosed when we release our year-end results,” he says.

Going forward, the operation of the new PGM plant will be governed by the existing unincorporated JV’s notarial pooling and sharing agreement between Merafe and Glencore Operations South Africa.

Meanwhile, Merafe reports that its attributable ferrochrome production from the JV increased by 42.7% year-on-year to 379 000 t for the year ended December 31.

Its share of production for the fourth quarter was 102 000 t – a 5.1% year-on-year increase, mainly as a result of current production being less affected by Covid-19 pandemic implications, coupled with improved plant efficiencies achieved at the smelters.

The Commission for Conciliation, Mediation and Arbitration (CCMA) has issued a certificate of nonresolution in respect of a gold wage negotiation dispute between JSE-listed Sibanye-Stillwater and labour unions the National Union of Mineworkers, Uasa, Solidarity and the Association of Mineworkers and Construction Union.

The certificate permits the unions to embark on a strike and the company, likewise, to implement a lock-out within a 12-month period.

Both parties need to give the other 48 hours’ notice before embarking on any action.

The CCMA has also established picketing rules and responsibilities, which ensure activities are conducted in a lawful, peaceful and orderly manner.

Sibanye, meanwhile, continues to urge unions to reconsider its offer, which it says is in line with consumer price inflation and follows several years of above-inflation increases.

The company says it will not be coerced into accepting a wage settlement that compromises the interests of other stakeholders.

As a result of the protracted negotiations, Sibanye decided in December to pay employees back-pay for July, August, September, October and November 2021 based on the current wage offer, even though an agreement on wage negotiations with unions had not yet been reached.

Sibanye’s current offer is for an increase of R520 a month in year one for Category 4 to 8 employees, R610 per month in year two and R640 a month in year three, which includes a R40 per month increase in the living-out allowance each year.

This would mean that an entry-level underground Category 4 production employee would be earning a guaranteed pay of R18 149 a month from July 1, 2021, and R19 670 a month by July 1, 2023, the company points out.

Miners, artisans and officials would receive an increase of 4.1% in year one, 4.7% in year two and 4.7% in year three.

After completing a 46-hole drilling programme and having conducted various geophysical surveys in October last year, TSX- and NYSE-listed Platinum Group Metals (PTM) is ready to advance the palladium-dominant Waterberg project to a development and construction decision.

The company’s other near-term objectives include completing a construction funding package and securing concentrate offtake agreements.

Moreover, PTM continues to advance an initiative through Lion Battery Technologies, which is focused on developing technologies related to platinum and palladium use in lithium battery technology. Lion works in collaboration with Anglo American Platinum and Florida International University.

PTM is the operator of the Waterberg project, with joint venture (JV) partners being Impala Platinum (Implats); Mnombo Wethu Consultants; Japan Oil, Gas and Metals National Corporation; and Hanwa.

PTM had spent $41-million in accumulated net costs on the project as at November 30, while all investor sources’ investment totals just under $80-million.

The company explains that before a construction decision can be made, arrangements will be required for project concentrate offtake or processing. To this end, a Waterberg JV budget for the 2022 financial year is in development and under discussion with the partner.

Meanwhile, PTM continues to work closely with regional and local communities and their leadership on how the mine can be developed to provide optimal outcomes and best value for all stakeholders.

The company is assessing commercial alternatives for mine development, financing and concentrate offtake. Studies to assess the economic feasibility of establishing a dedicated Waterberg matte furnace to process concentrate as an alternative to a traditional concentrate offtake arrangement are under way.

Hanwa holds the exclusive right to buy or directly sell all or part of the Waterberg project concentrate or metal contained therein. Hanwa may, therefore, direct the processing and marketing of concentrate or contained metal at market prices.

MARKET MOVEMENT

The market for platinum, palladium, rhodium, and gold (4E) in particular, has improved since 2019, resulting in generally higher 4E metal basket prices in 2020 and 2021, reports PTM.

In 2021, the impact of a global shortage of semiconductors resulted in reduced global automotive production. The concurrent reduction in demand for 4E metals led to prices for each of them falling from their mid-year highs.

PTM says the effects of the semiconductor shortage are expected to ease this year or next.

Industry analysts estimate a return to strength in the market for platinum, palladium and rhodium based on projections for a recovery in car sales and the longer-term potential for the emergence of hydrogen-based technologies using 4E metals.

The projected market penetration of battery electric vehicles in the future is expected to soften the market for palladium in the longer term as demand for internal combustion engines with catalytic converters is potentially reduced.

On the other hand, platinum, rhodium, gold, copper and nickel are projected to experience strong demand in the longer term.

This week, Mining Weekly Editor Martin Creamer unpacks South Africa’s first green ammonia project, which launches next week; foreign direct investment for countries transitioning to clean energy; and whether South Africa has effectively deployed funds secured at COP26.

The recent civil unrest in Kazakhstan – the world’s biggest producer of uranium – underscores the need for increased regional diversification of supply, says Toronto-listed developer GoviEx Uranium, which owns projects in Niger, Zambia and Mali.

In a letter to stakeholders, executive chairperson Govind Friedland and CEO Daniel Major say that the outlook for uranium has become increasingly positive and that the crisis in Kazakhstan has highlighted the potential risk to output, given the concentration of supply.

Kazakhstan, which supplies about 40% of the world’s uranium, has been rocked by major anti-government protests, which led to the resignation of the government on January 5.

National atomic company Kazatomprom said on January 13 that it had not experienced any delays or disruptions to production, deliveries or sales plans and that it it remained "a secure and reliable supplier, despite operating in a jurisdiction of higher perceived political risk.

Canadian uranium major Cameco also warned that the situation in Kazakhstan should be a reminder for utilities that an over-reliance on any one source of supply is risky.

Friedland and Major believe that GoviEx’s projects could provide regional diversification at a time when demand for uranium is forecast to increase with China having pledged to build 150 new nuclear reactors by 2060, and the prospect that nuclear may be included in EU taxonomy regulation.

“The outlook for uranium has become increasingly positive and we have worked diligently to position ourselves to take full advantage as a new entrant to the market,” Friedland and Mayor note.

GoviEx’s main focus is its flagship Madaouela project, in Niger. A feasibility study for the fully-permitted project will be completed by mid-year, with a target of starting production in 2023. First commercial uranium production is targeted in 2025.

The prefeasibility study of February 2021 estimates that the mine will produce 2.48-million pounds a year of uranium oxide over 20 years, at a cash operating cost of $22.18/lb.

Startup capital expenditure of $347-million will be required.

The company’s two other assets are the mine-permitted Mutanga project, in Zambia, which is forecast to start production in 2027, and the Falea project, in Mali.

Mutanga could be the lowest capital-intensive uranium project in Africa, Friedland and Mayor say. According to a 2017 preliminary economic assessment, Mutanga will require startup capital of $121-million to develop a mine producing 2.6-million pounds a year of U3O8 at a cash cost of $31.1/lb over 11 years.

Falea is a “fascinating exploration project with great potential”, the GoviEx executives note. The project contains an indicated resource of 17.4-million pounds of U3O8, 24.4-million pounds of copper and 16.1-million pounds of silver, as well as an inferred resource of 13.4-million U3O8, also with copper and silver mineralisation.

The World Gold Council (WGC) highlights in its latest outlook for gold that the precious metal may well face similar dynamics to those of last year as competing forces both support and curtail its performance.

The gold price will likely react to tightened monetary policy this year, as a result of global banks trying to control inflation. Yet, while rate hikes can create headwinds for gold, history shows their effect may be limited, the council reports.

Simultaneously, elevated inflation and market pullbacks can likely sustain demand for gold as a hedge.

This while long-term support for gold will come from continued central bank demand and jewellery markets.

In the meantime, the WGC says that, although the gold price rallied into the year-end on the heels of the rapidly spreading Omicron variant of Covid-19, ending the year at $1 806/oz, only 4% lower than at the end of 2020, it was not enough to offset the weakness experienced in the first half of 2021.

The first half of 2021 saw investor optimism over vaccine rollouts resulting in reduced portfolio hedges and gold outflows from exchange-traded funds.

The rest of the year was a tug of war between uncertainty about new Covid-19 variants, increasing risks of persistently high inflation and a rebound in gold consumer demand, against interest rates and a stronger dollar pushing gold demand down.

This year is poised to see a hawkish stance from the US Federal Reserve, with it aiming to reduce the size of its balance through tightened monetary policy. On the other hand, the European Central Bank has indicated it is unlikely that interest rates will rise in 2022, despite recent record inflation prints.

The Reserve Bank of India has also signalled its intention to maintain its accommodative monetary policy stance to revive economic recovery.

The views remain mixed over whether inflation will linger and the WGC explains that central banks initially played down inflation concerns, and while some have acknowledged upside risks, there is an underlying expectation that inflation will dissipate.

“Investors seem to be less sure. While the vast majority expect inflation to remain high, many still believe it will cool down. Gold historically performed well amid high inflation,” the WGC notes.

The council adds that, despite potential rate hikes by some central banks, nominal rates will remain low from a historical perspective. Even more so, elevated inflation will likely keep real rates depressed. This is important for gold, since its short- and medium-term performance tends to respond to real rates.

“It has been two years since the start of the pandemic and the world seems ready to move on. Global stock markets have strongly rebounded from their 2020 lows, albeit at different rates. But ‘tail events’ have also been on the rise.

“Pullbacks are likely to continue in the face of the seemingly endless stream of new Covid variants, as well as simmering geopolitical tensions and overall buoyant equity valuations fuelled by a long-lasting ultra-low rate environment,” the WGC says.

The council adds that, in this context, gold can be a valuable risk management tool in an investor’s arsenal. Gold has a proven record of mitigating the negative impact of equity market pullbacks in periods of systemic risk.

The WGC summarises its outlook by stating that gold can still receive positive support in 2022 from key jewellery markets such as India and central banks will remain an important source of demand.

“[But] gold’s performance in 2022 will, ultimately, be determined by which factors tip the scale.”