Gilbertson considers SA manganese stake
David McKay
Posted: Tue, 03 Jul 2007
miningmx.com
[miningmx.com] -- PLANS to increase manganese production from South Africa’s Northern Cape province were turned up a notch by an announcement last week by Kalagadi Manganese it would double the capacity of its proposed mine.
Those proposals may soon by matched by Renova Group, the Russian company that said in March it was advancing a bankable feasibility study that could approve a 1.5 million to 2 million tonnes/year manganese concentrate mine. Like Kalagadi Manganese it wants to build a smelter at Coega that will pump out ferromanganese, a product that goes into making steel.
Kalagadi Manganese hopes to complete its bankable feasibility study by year-end.
For its part, Renova Group is only weeks away from submitting its bankable feasibility study. Both are certain to disturb the gentle balance of world manganese production if they are successfully developed.
Over-arching those machinations is veteran miner Brian Gilbertson, whose newly formed company – Pallinghurst Resources – has recently upped its offer for Consolidated Minerals (ConsMin), a firm listed in Australia. Gilbertson wants to turn ConsMin into a new mining house specialising in minerals that feed the world’s steel industry, such as manganese.
Gilbertson’s right-hand man Arné Frandsen said Pallinghurst knows and loves South Africa’s manganese. Lest we forget, Gilbertson was chairman of Samancor for seven or eight years. In fact, Gilbertson is even considering investing in either Renova’s mine or that of Kalagadi Resources.
“We absolutely have an interest in the Kalahari Basin,” said Frandsen. “But the right way to go about that investment is yet to be determined.”
The big problem is infrastructural. Transporting concentrate from the northern reaches of South Africa to the Eastern Cape remains an unsolved issue. So too is finding the electricity supply to power the smelters at Coega.
However, not everyone agrees with that. David Wellbeloved, technical director at Kalagadi Manganese, remained confident that water and power are available for both itself and Renova.
The freight bottlenecks have also been somewhat overstated because rolling stock is in short supply – not the more insoluble problem of rail capacity. “Were the manganese exports to suddenly stop from the Northern Cape that line (to the Eastern Cape) would be pretty quiet,” said Wellbeloved.
Said Frandsen: “We have other options to the South African investment, such as Gabon, where we can virtually roll the rock down the hills into the port.” However, manganese is abundant in South Africa, which holds 80% of world resources.
Wellbeloved said the lower reaches of its manganese deposit, which descend to 1.1km, will only be accessed in 500 years’ time.
However, Frandsen worried that fixed transport and power costs in a cyclical market are an accident waiting to happen. “If you’re not producing high grades, you’re vulnerable to a downturn in the market.” Nonetheless, up to four or five investment options are being eyed by Pallinghurst. Frandsen said it was possible the new manganese mines and smelters could be developed in a more structured manner.
Does that mean Gilbertson’s Pallinghurst sees itself as the consolidating force in South Africa’s new manganese production? Could both business ventures be melded? Frandsen wouldn't say.
Meanwhile, existing manganese producers – such as Samancor Manganese, jointly owned by Anglo American and BHP Billiton, and African Rainbow Minerals – are concerned the market will be disturbed by the entrants. Ownership in manganese production is tight.
“That argument doesn’t wash,” said Daphne Mashile-Nkosi, chairman of Kalagadi Manganese. Mashile-Nkosi said buoyant steel demand from China and elsewhere is encouraging more production, not limiting it.
“China is becoming increasingly interested in securing manganese,” said Wellbeloved. Such is the demand for steel resources in China that it’s becoming a net importer.
Click Here to subscribe to our daily newsletter
Kalagadi Manganese is 80% owned by Kalahari Resources, a company controlled by a women’s group and led by Mashile-Nkosi. The other 20% is owned by the Industrial Development Corporation (IDC), which pumped R60m into the feasibility study.
Mashile-Nkosi said Kalagadi Manganese would now produce 3 million tonnes/year of manganese concentrate from its mine in the Kalahari Basin. It’s also invited foreign investors to partner it and has whittled down 16 applications to a short list that includes Sino Steel of China and Kermas.
The original scope of the Renova manganese mine was around 1.5 million to 2 million tonnes of concentrate, with first production scheduled to begin in either fourth quarter 2008 or first quarter of 2009. That may be expedited, as Kalagadi Manganese has done with its venture. Quite whether Renova will also aim to produce more manganese in the future remains to be seen. |
