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A Japanese company has shown it is prepared to pump billions ofrand into the Northern Cape in pursuit of its target of controllingabout 10% of the world's 5 MT per year seaborne manganesetrade. Manganese is used in making steel. Asia Minerals Limited was founded 19 years ago by Mr HirotakaSuzuki, a trader who was marketing manganese from BHPBilliton's Mamatwan mine in the Northern Cape. Between 2000and 2010 AML was marketing about 1.5 MT per year of manganeseproduced by Assmang's Gloria mine to Chinese and Indianbuyers. It stopped when it started its own mine. AML is now 49% shareholder in the Kudumane Manganese mine in theNorthern Cape which is close to and has high grades similar to bothGloria and Mamatwan. Two black empowerment entities, DirletonMinerals & Energy and Northern Cape Manganese hold the other 51%.Mr Zwelakhe Sisulu who is chairman of Dirleton is also chairman ofKudumane Manganese Resources, the holding company. This shareholding structure was reached only after several years ofconflict over who would have the majority shareholding, whichultimately required the intervention of minerals minister SusanShabangu because it was paralyzing progress. Last week Shabangu hitthe button for the first blast at Kudumane which will be followedby a period of bulk sampling before full scale open pit miningbegins later this year. Mr Suzuki said that the partners will invest ZAR 1.5 billion inproportion to their shareholdings in the first phase of Kudumane toproduce 1.5 MT per year of manganese ore. This will be 40% equityand 60% debt, through a loan from Standard Chartered Bank. In aboutanother two years the partners will decide whether to investanother ZAR 1.5 billion in a sintering plant to concentrate themanganese from 37,5% to 44%. More capital would be needed to makethe transition from open pit to underground in about sevenyears' time, when annual output would rise to 2.5 MT. He said that about a third of the ore needed to feed the smelterswill come from SA and the other two thirds from other countries.There are substantial resources on the six farms over whichKudumane holds mineral rights. On one farm, York about 70% of the100 MT resource is lower grade, so it would reduce logistical coststo build a smelter on site in future to beneficiate the low gradeore, some for the local market but mostly for export. Howeversmelting is an energy intensive process. Though Shabangu reiterated at the opening ceremonygovernment's target of growing SA's steel makingcapacity to replace imported steel in the infrastructure buildprogram, SA's steel industry is at present far too small toabsorb all the country's production of iron ore, manganeseand chrome. Neither steelmaking nor its downstream suppliers willbe able to grow until government can provide sufficient,competitively priced electricity. Mr Suzuki said that another problem which Kudumane has had totackle is getting its ore to port. In the first production phase itwill truck the material to Durban. The capacity of the main exportline to Port Elizabeth is about 5 MT per year which is fully usedby Billiton, Assmang and United Manganese of Kalahari. Theiragreement with Transnet expires next year and from April a newcontract will be signed in which Kudumane will participate. He said that transnet has committed to expand capacity on the lineand at a new terminal at Coega to 16 MT per year so Kudumane isconfident it will secure enough rail allocation to port. The challenges that AML has had to face as a foreign investor in SAhave been intimidating. On top of the language differences andcurrency risks presented by any country, SA also has complex blackempowerment laws and shortages of power and transport. SA'smines need to offer sufficiently attractive profit margins to makeit worth the effort. Source - FM.co.za. The e-commerce company in China offers quality products such as Personalized Sticky Notes Manufacturer , China Braille Books for Children, and more. For more , please visit Printing Sticky Notes today!
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