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South Africans are well within their rights
to be very proud of the iron-ore that is produced in the country.
That is the view of Sedibeng Iron Ore CEO
Aneesh Misra, who is also MD of IMR South Africa. (Also watch attached Creamer
Media video.)
Switzerland-based IMR, as the majority
owner, came into the management of the Sedibeng operation two-and-a-half years
ago. Since then, it has been focusing on optimising the operations and trying
to improve the efficiencies.
Located near the town of Postmasburg, in
the Northern Cape, Sedibeng has a rail-matching capacity of two-million tonnes
of iron-ore a year – but, with more rail availability, it could be producing
considerably more iron-ore for export.
IMR is also part of a consortium that is
acquiring the PPC Lime mining and processing operations, also in the Northern
Cape, for R515-million.
Sedibeng produces lumpy iron-ore and the
iron content combined with the hardness of the lumps “definitely provides an
edge against some of the other products that are available from Brazil and from
Australia,” Misra told Mining Weekly in a Zoom interview.
“The demand is there and I think South
Africans are well within their rights to be very proud of the material that is
produced in the country."
Typically, global market pricing is
conducted against Platts, with a lump premium attributed for what the lump
brings to a blast furnace in the steelmaking process.
“There’s a lump premium that is attached to
our sales but obviously it is guided by market demand so the moment that there
are huge environmental restrictions that come into play in China, the lump
premiums do start making an impact, particularly because lumps are more
desirable from a blast furnace perspective and reduce the environmental impact
as a result," said Misra.
Sedibeng’s output capacity matches the rail
allocation that it has on the 861-km-long electrified heavy-haul ore export
line (Orex) to the Port of Saldanha, for export into global markets.
“In terms of the future growth plans, the
mine can definitely expand. The mine can produce 2.5-million tonnes to
three-million tonnes but obviously that’s guided by how much rail capacity can
come on line on the Orex side of things,” he said.
The way that IMR envisions any investment
into any mining asset is by attributing value to the local workforce.
Its focus is to remove overworked corporate
structure in the company and to instill more responsibility and authority into
the existing workforce and to implement initiatives that were brought in by the
workforce itself.
“When we went into the investment, no one
had quite envisioned the height to which the iron-ore price would ascend.
“It was pre-Covid, pre-exiting Covid and
trying to understand the market as a whole. The volatility is so great that one
can never benchmark any operating feasibility at these existing prices.
“When we were considering Sedibeng and when
we executed the deal, it was back in 2018. At that point, iron-ore prices were
considerably lower. They were hovering around $70/t to $75/t, and even then
Sedibeng was a company that was operating efficiently and profitably at those
levels.
“We focused on trying to bring our cost
threshold down and we would like to think that we have used the time to prepare
for when the prices do correct,” said Misra.
All of Sedibeng’s iron-ore goes to China,
where the unlisted company has cultivated a home for its product in certain
steel mills.
“At two-million tonnes a year we don't have
the longevity to get into offset contracts and two-million tonnes for a market
like China is a drop in the ocean.
“But there are certain steel mills that we
do work with. We try and optimise our sales strategy accordingly and therefore
it’s a hybrid where it is going into spot on a monthly basis, but we know our
end-users and we try to manage their need as much as possible,” Misra added.
LIME INVESTMENT
As reported by Mining Weekly, IMR, as part
of the new owner of PPC Lime, Kgatelopele Lime, will be focusing on developing
new markets for its product and expanding its customer base.
Kgatelopele is a consortium made up of
mineral resources trader IMR Resources South Africa, mining-focused investment
holding companies Kolobe Nala Investment Lime and HEX2M, as well as JJJL Mining
– which is an entity owned by a former PPC CEO Johannes Claassen, who has an
extensive understanding of PPC Lime and its operations.
Kgatelopele entered into transaction
agreements with JSE-listed PPC earlier in May to acquire the subsidiary for
R515-million.
The new owners expect the transaction to
conclude by the end of the year; however, the rights, benefits and advantages
of PPC Lime transferred to Kgatelopele on April 1.
Post completion of the transaction, PPC
Lime will be 39% black-owned, including by black-economic empowerment
investors, PPC Lime employees and host communities.
The name Kgatelopele – a Setswana word
meaning ‘progress’ – is shared with the local municipality in which the mine is
located, to symbolise the new owners’ intention to embrace the broader
community as partners.
PPC Lime’s Northern Cape mining and
processing operations manufacture reactive lime, hard burnt lime, hydrated
lime, burnt dolomitic lime and raw limestone. It supplies industries such as
iron and steel, alloys, gold, uranium, copper, nonferrous metals, sugar
refining, water treatment and flue gas desulphurisation.
PPC Lime mines out of two quarries, while a
rotary kiln plant manufactures the burnt product. The primary limestone quarry
started operations in 1954 in Lime Acres on an extensive reserve of
metallurgical quality limestone and dolomite.
The total calcination capacity at Lime
Acres is 900 000 t/y, making PPC Lime a leading supplier of these products in
sub-Saharan Africa.
Traditionally, lime is mostly used in steel
manufacturing, where it serves as a flux to remove impurities such as silica,
phosphorus and sulphur.
Kolobele Nala founder Billy Mawasha has
told Engineering News & Mining Weekly that PPC Lime has traditionally
serviced the iron and steel sector, but there are opportunities for the company
to pursue more opportunities in the water treatment and the nonferrous metals,
including gold, platinum and copper, mining sectors.
He adds that the company will also pursue supplying
companies such as petrochemicals giant and coal miner Sasol with lime for
fluorodeoxyglucose gas desulphurisation.