South African Business 2018 edition

OVERVIEW tive, working

OVERVIEW tive, working better with the communities in which it operates. New CEO, Mxolisi Mgojo, is simultaneously leading his company, Exxaro Resources, on a programme to make mining sustainable through measures such as water sharing with local communities and finding ways to help communities gain access to energy. The national government’s Phakisa programme is also to be applied to mining. Intended to fast-track solutions to development problems, an Operation Mining Phakisa Lab has been set up to create concrete plans. Another significant change in the South African mining landscape was the decision of Anglo American to focus on three minerals: copper, platinum and diamonds. Although Anglo has not begun a wholesale sell-off of coal, manganese and platinum assets (because rising prices have made some mines very profitable again), sales have begun. The first move came in April 2017 with the sale of Anglo’s thermal coal operations to Seriti, a blackowned company lead by Mike Teke, the outgoing president of the Chamber of Mines. Seriti paid R2.3-billion for the New Vaal, New Denmark and Kriel collieries as well as four closed collieries. Seriti thus became the second-largest provider of thermal coal to Eskom. The other big supplier to Eskom is Exxaro, which supplies about 33-million tons. Exxaro’s recent purchase of Total Coal South Africa (TCSA) took to six the number of mines the company has in Mpumalanga. Exxaro’s Grootgeluk mine in Limpopo is a huge operation and gives the company a presence in the Waterberg area, where an estimated 40% of South Africa’s coal reserves lie. This amounts to about 75-billion tons of coal, but to get that coal to the coast for export would mean a rail extension of 464km at a cost of R37-billion. Transnet Freight Rail (TFR) is conducting a feasibility study. Assets South Africa has huge reserves of platinum and chrome and produces about 40% of the world’s vanadium and vermiculite. The country has large reserves of ilmenite, palladium, rutile and zirconium and 80% of the world’s known manganese reserves are located in the Northern Cape Province. South Africa also produces 75% of the world’s platinum and 73% of its chrome. Despite uncertainty on the global market, Northam Platinum has continued to buy assets. In 2015 it bought Everest South in Limpopo from Aquarius, a move that will allow it to consolidate operations at its adjacent property, Booysendal South. Northam, which also has assets in the North West province, aims to produce 850 000oz of PMGs from 2022. A court ruling in February 2017 has opened the way for Ivanhoe to build its Platreef Project on the northern limb of the Bushveld Igneous Complex. R70-million has been committed to the first phase. If the mine achieves the projected production rate of 12 Mtpa with 1.2-million ounces of PMG, it will rank as the biggest PGM mine in the world. Amplats and Lonmin are trying to reduce costs. Amplats has sold its Rustenburg operations to Sibanye and Lonmin has put some shafts that are expensive to run on care and maintenance. With a depressed platinum price, platinum miners are hoping that SOUTH AFRICAN BUSINESS 2018 66

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