Johannesburg - A ground breaking mechanised platinum mine is on the cards for Makopane in Limpopo, as Robert Friedland, the executive chairman of Ivanhoe Mines, gave a vote of confidence for the industry despite declining investor perceptions following last year’s wave of labour unrest.
Prospecting for platinum group elements, nickel and copper at the Platreef mine, which Friedland said “will be a model 21st century mine”, was announced in early September with an R800 million outlay for the initial shaft.
“We are going to build this mechanised mine on a firm foundation, with rock solid legs,” he said.
The automation of mining has this far been an academic debate on the alternatives to labour, which industry insiders have constantly declared to be the biggest cost driver.
Friedland said the Platreef project would be mechanised and while it might not have as many employees as traditional mines, 10 000 direct and indirect jobs would be created through the construction and production phases.
The empowerment deal for the project will involve the majority stake going to communities, a women and children’s trust and employees.
Speaking at the Joburg 2013 Conference: Investing in Resources and Mining in Africa, Friedland took a bullish view of the local mining industry.
Ivanhoe is a Toronto-listed company that is building the Platreef project in Limpopo, and Kamoa copper project in the Democratic Republic of Congo. It’s plans for a secondary listing on the JSE are at an advanced stage.
In his address, Friedland noted that the government wanted to ensure that when mines extracted minerals, the country got the maximum benefits, and noted the importance of regulatory certainty.
“The review of mining legislation, which is currently under way, has raised some concerns. But we have seen the ruling party here kick the nationalisation debate into touch. Should that not give us confidence?”
Friedland was referring to the Department of Mineral Resources’ efforts to address the uncertainty through the Mineral and Petroleum Resources Development Amendment Bill, which is before Parliament.
However, mining companies are opposed to the key amendment, in which the minister of mineral resources will be given discretionary powers to declare certain minerals strategic, including coal, manganese and iron ore, in order to control domestic pricing.
“What is important to us as a company is that everyone knows the rules of the game, that the playing field is level and that the referee is independent. Investors must have clarity on policy, confidence in the system. The rest will follow,” Friedland said.
South Africa’s rankings in a Fraser Institute survey fell to 64 out of the 96 jurisdictions assessed in the policy index for 2012 and 2013, demonstrating the consequences the regulation of the mining industry is having on investor confidence.
Neal Froneman, Sibanye Gold’s chief executive, said the industry was addressing the migrant labour challenges that had fuelled the Marikana tragedy last year.
He said he did not think the migrant labour system was bad, rather the issue was how to make to it work.
“Getting workers home every two to three months is something that is implemented in other parts of the world. We are working on an arrangement that will work,” Froneman said.
The conference continues today. - Business Report