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Mining & Metals
North West is the Platinum Province.
Mining drives the economy of the North West. It accounts for 31% of the provincial gross domestic product (PGDP), employs more than 60 000 people and makes up 15.5% of South Africa’s mining gross domestic product. Platinum is the most important mineral found in the province although there are also large reserves of granite, chromite and gold.
Other minerals found in the North West include fluorspar, vanadium, rhodium, uranium, copper, limestone, slate, phosphate, manganese, coal, cement, nickel and diamonds. An integral part of the province’s development strategy is to go beyond mining and to beneficiate the mineral wealth of the North West.
There are already smelters in the province, which make up a large part of its heavy industrial capacity. Anglo Platinum’s Waterval Smelter in Rustenburg processes wet concentrate to produce sulphur-deficient nickel copper matte which is rich in platinum group metals (PMG). This is taken to the base-metals refinery, which in turn has two metallurgical plants, a magnetic concentration plant and a base-metals refinery. The
Mortimer Smelter, near Rustenburg, was rebuilt in the course of 2008. Although production was down in 2008, Anglo Platinum still smelted a million metric tons of concentrate in the financial year.
Another processing hub is found in the Klerksdorp/Orkney area, where AngloGold runs four gold plants, a uranium plant and a sulphuric-acid plant. Collectively, they can treat up to 420 000 metric tons every month. This is in support of the company’s four mines.
The North West Bushveld Igneous Complex is the world’s richest source of platinum, with the main reefs being UG2 and Merensky. The province produces 64% of South Africa’s platinum, 46% of its dimension stone and granite, 32% of its chromite and 25% of its gold.
The South African mining environment will undergo something of a shift when the provisions of the Mineral and Petroleum Resources Royalty Act are implemented in the course of 2010. A new royalty tax on unrefined and refined minerals will become payable in the course of the year. All mining companies will be expected to keep an accurate record of their earnings before interest and tax so that they will be in a position to pay the correct amount for the new royalty tax.
Platinum and platinum group metals
Between June and December of 2008, the price of platinum fell by 50%, but by early 2010 had recovered to more than US$1 200 per ounce. South Africa produced 78% of the platinum in the world in 2009, with month-on-month volumes up by 35% in October 2009.
Anglo Platinum has 10 wholly owned mines in the North West Province and has a target of producing 2.5 million ounces of platinum per year, but this will depend on market conditions. The company is involved in several joint ventures, primarily with black companies. Among these are ARM Mining Consortium Limited, Royal Bafokeng Resources Holdings and Xstrata Kagiso Platinum Partnership.
Impala Platinum produced 1.7 million ounces of platinum in 2009, and although sales revenues dropped by 30%, they still amounted to R26-billion. The company operates 14 established shafts (with three new ones being developed) in the North West and has 29 500 direct employees.
The world’s third-largest platinum producer, Lonmin, has a large mine at Marikana between Rustenburg and Brits. In 2009, the company sold 663 101 ounces of platinum. It has plans to sink three new shafts and push production up to 850 000 ounces by 2013.
Preliminary studies done by Platinum Australia on behalf of African Rainbow Minerals (ARM) show that a new area – outside where platinum is normally found and much further west than other deposits – is viable for mining operations. The Kalahari Project (Kalplats) is a joint venture between ARM Platinum (90%) and Anglo American (10%). The pre-feasibility figures released by Platinum Australia suggest that a million ounces of platinum, gold, rhodium and palladium could be mined from the area over a nine-year period.
In 2009, South Africa produced 35% of the world’s palladium and 86% of the world’s rhodium.
Gold
Gold production levels declined dramatically in South Africa in 2008, totalling only 220 tons. The eastern edge of the province – stretching from Carletonville to Klerksdorp – is the centre of gold-mining operations in North West Province.
In early 2009, AngloGold Ashanti announced that it had sold its Tau Lekoa mine near Orkney to Simmer and Jack Mines (Simmers). When the sale is finally approved by the national department responsible, Simmers, which operates the substantial Buffelsfontein mine, will be the fourth-largest producer of gold in South Africa.
The Orkney mine of Pamodzi was one of the assets seized by liquidators in the course of 2009, with the fate of 1 800 employees left in the balance. The mine is for sale.
Four major companies are active in the Carletonville goldfields: AngloGold Ashanti, Goldfields, Harmony and DRD. Goldfields’ Driefontein mine produced 830 00 ounces in 2009 and employed 15 000 people, while DRD’s Blyvooruitzicht produced 141 000 ounces in 2008. Harmony’s Kalgold mine near Mafikeng produced 64 784 ounces of gold in 2009, a drop of 30% from the previous year.
Other minerals
Although there are considerable fluorspar deposits in the North West, Sallies, a JSE-listed mining company, stopped operating its Witkop mine in June of 2009 on the back of a dramatic falloff in demand for acid-grade fluorspar.
AngloGold Ashanti announced plans to invest in a uranium recovery plant on the site of its Kopanang mine in 2009, with a projected start-up in 2011. Although the global price for uranium suffered in 2009, demand is still thought to be sufficient to encourage new investments.
Diamonds are found in several parts of the North West: Lichtenburg, Koster and Ventersdorp near the centre, and Christiana and Bloemhof further south.
Granite and slate are found in good quantities, as is dimension stone. There are more than 20 quarry operations in the province, with Rustenburg being the centre of granite mining.
A large quantity of chrome is produced as a by-product of platinum mining but there are several dedicated mines in the North West, producing chromite as feed for the ferrochrome industry.
New project
One of the last economically viable limestone deposits in South Africa is to be mined and processed by Sephaku Cement, a company that listed on the JSE in the second half of 2009. AfriSam, PPC and Lafarge already have a significant presence in the Mafikeng/Lichtenburg area,
but Sephaku is confident that its clinker and cement production facilities, due to come onstream fully in 2012, will be supported by raw materials for at least 30 years.
Beneficiation
Mafikeng’s industrial development zone (MIDZ) is focusing strongly on mineral beneficiation as a means of weaning the province’s economy off an over-dependence on raw-material mining. The intention is for this hub to concentrate on:
- Manufacture of gold and platinum jewellery
- Cutting and polishing of granite, marble, precious and semi-precious stones
- Retail outlets for precious and semi-precious stones
- Skills training
A feasibility study has been concluded into the possibility of recovering platinum and other precious metals from used catalytic converters. The Automotive Industry Development Centre, which ran the study, has recommended that two facilities could be developed to support the concept: a PGM recovery unit and a multi-feed operation. Key to the success of such projects would be to establish partnerships at both ends of the production cycle: with international suppliers of reject or used catalysts and with local PGM refineries.
Invest North West has a Belgian investor who is prepared to invest in a granite mine that will guarantee supply of granite to a planned granite beneficiation plant. The projected cost of the project is R750-million and would involve the cutting and polishing of granite slabs and tiles for the local and international market.
The Platinum Trust of South Africa promotes PMG beneficiation and has lined up a number of projects such as the establishment of a Platinum Theme Park in Rustenburg, the creation of an incubator to facilitate training and an effort to link with retail organisations such as the World of Platinum Marketing.
Rustenburg is to host a Mining Supply Park, intended to drive beneficiation by grouping suppliers, manufacturers, producers and retailers together in one area, encouraging them to trade with one another and reducing transport and storage costs. A Centre for Advanced Manufacturing in Potchefstroom provides a re-engineering service to the extrusion and mining industries.
As well as increasing the economic benefit after extraction, the Mining Supply Park will also increase the economic activity in the province from the supply side. Eighty percent of all mining supplies to the North West are sourced from outside the province. The park will contain 30 000 square metres of warehousing facilities and 20 small factories (at a total cost of R700-million). The objective is to have 50 suppliers of critical mining machinery clustered around one central point, to their advantage and that of the mining industry. A central park will also increase access to and opportunity for skills training and transfer, especially for women, and will create employment opportunities.
Corporate social investment
Hundreds of millions of rands are invested in community projects and skills development by South Africa’s mining companies. The Anglo American group of companies alone spent R288.5-million on a wide variety of projects through the Anglo American Chairman’s Fund (R71-million) and the various individual companies. One of the Chairman’s Fund’s flagship projects, the Rural Schools Programme, is a successful national programme while LifeLine North West, based in Rustenburg, is a 24-hour crisis intervention centre that receives support from the fund.
Anglo Platinum’s CSI initiatives focus on three main areas: the physical condition of host communities; health, safety and welfare; and creating opportunities for community members to grow economically from the company’s operations. Support for entrepreneurs and co-operatives has led to several successful businesses such as Basadi Recyclers, Butterland Bakery and various fish and tunnel farms. School infrastructure programmes have been rolled out across all the areas where Anglo Platinum operates and clinics have been built in Ga-Mabuela, Thabazimbi and Ga-Madiba.
