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ARM loses manganese rights to Renova
David McKay
Posted: Mon, 11 Jul 2005
[miningmx.com] -- PROSPECTING rights to Northern Cape farms containing an estimated 350 million tons of manganese have been awarded to three groups of empowerment firms – and excludes original owner Assmang.
Sandile Nogxina, director-general at South Africa’s Minerals & Energy Department, confirmed the awards. “Yes, we’ve allocated prospecting rights in the Kalahari.”
Nogxina’s chief director, Jacinto Rocha, also confirmed that a Russian firm – Renova – had been appointed “technical partner” to one of the empowerment groupings. Russian oil magnate Victor Vekselberg, who is Brian Gilbertson’s boss at aluminium firm Sual, leads Renova, which has offices in Cape Town.
That’s unwelcome news for African Rainbow Minerals (ARM), which owns 50,3% of Assmang. (For the purposes of mineral right applications for manganese, all of ARM’s affairs are channelled through Assmang.)
Jan
Steenkamp, a senior manager of ARM’s ferro-alloys division, says that the manganese industry is small and easy to disturb. For example, a new major supplier of manganese might not only trigger a price war but could also create a potential infrastructural logjam without the necessary port or rail expansions.
There’s already been a dispute regarding the ability of South Africa’s national transport utility Spoornet to accommodate the iron ore and manganese production increases of Kumba Resources and Assmang. Says Steenkamp: “Unless there’s an expansion new players in the industry could see an established one restricted.”
But Rocha is adamant that the awards to the three groupings is how the legislation is intended to operate. “Prospecting licences are awarded on a first come, first served basis.” In terms of the law, Assmang didn’t renew its prospecting licences for the manganese fields, a development that would have required it to introduce an empowerment partner
with as much as 51% ownership.
However, Rocha concedes that the successful applicants are mostly “no-name” brands inexperienced in mining manganese. They include Chancellor House and Tista (which has Renova as a technical partner) and Pelawan and Ditswamung. Only Saki Macozoma’s Ntsidimtle has a well-known mining partner in BHP Billiton’s Samancor.
But Steenkamp believes that there’s an opportunity for potential synergies with the empowerment players. “Renova would probably understand the manganese market, but we’d pursue any opportunities for synergies and for working together.”
Importantly, the manganese property awards leave ARM’s manganese expansion plans intact. Steenkamp says: “Our plans are built around current capacity over the next 20 years. We’re not having any sleepless nights about this.”
Assmang produced 1.4 million tons of manganese ore in 2004 from its Gloria and Nchwaning mines. However, it intends to increase production to 3.5 million
tons by 2011. The company has total manganese reserves of 131 million tons and resources of 631 million tons.
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