Johannesburg - Susan Shabangu, the Minister of Mineral Resources, has called on the mining industry to transform or “ship out” and is confident that the government will resolve concerns linked to the amendment of the mining legislation.
“A mining industry which refuses to transform has no place in South Africa. For this government, it is either you work with us or ship out. Transformation is important,” Shabangu said on Friday.
She was speaking during the launch of Kalagadi Manganese’s R7 billion mining and beneficiation project in Hotazel, Northern Cape.
The project is expected to produce about 2.4 million tons of manganese a year from May. In addition, Kalagadi plans to construct a ferromanganese smelter complex in the Coega industrial development zone, outside Port Elizabeth, where it will beneficiate 320 000 tons of high-carbon ferromanganese alloy a year. Construction will begin in February and continue over 18 months.
Shabangu said that the government and the mining sector were close to finding each other In terms of the amendments to the Mineral and Petroleum Resources Development Act.
“The issues that have resulted in uncertainty will be resolved,” the minister said.
Among the concerns raised by mining industry bosses in the proposed amendments is the alteration to section 26, which deals with beneficiation.
The government also wants to declare certain minerals strategic. Once it has done so, the minister will have powers to impose export restrictions and set the price of commodities like coal.
Manganese is an essential component in stainless steel and China’s infrastructure development is a major consumer of manganese products. South Africa is home to 80 percent of the world’s high-grade manganese deposits.
Kalahari Resources owns 40 percent of Kalagadi and the Industrial Development Corporation owns 10 percent. In November last year, Luxembourg-based ArcelorMittal agreed it would sell its 50 percent stake in Kalagadi following court battles to end differences between the shareholders.
Speaking on the sidelines of the event, Kalagadi chairwoman Daphne Mashile-Nkosi confirmed the company had experienced issues with ArcelorMittal, the world’s biggest steel maker, and said these had been resolved.
“We would love to buy 100 percent of Kalagadi, and I am at the mercy of financial institutions. I have signed term sheets, but I cannot reveal who [they] are because of confidentiality,” she sad.
President Jacob Zuma said he was encouraged by companies such as Glencore Xstrata, which recently listed on the JSE, “demonstrating confidence in the mining sector”.
Glencore Xstrata already has a primary listing in London and a secondary listing in Hong Kong. With a market capitalisation of R732 billion, it is the third-largest company on the JSE.
At least 3 000 direct jobs will be created by the Kalagadi project. Zuma said the development of infrastructure in the Northern Cape was encouraging. “Although the Northern Cape is arguably one of the wealthiest provinces in terms of mineral resources, it is still the poorest in a number of aspects.” - Business Report