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Samancor Manganese mulls pool and share Posted: Wed, 06 Dec 2006 [miningmx.com] -- SAMANCOR Manganese, jointly owned by BHP Billiton and Anglo American, is considering plans to pool and share its manganese resources in the Northern Cape province with those resources recently awarded to a group of empowerment companies, including Pitsa ya Setshaba. According to market sources, Samancor Manganese wants to use access to its existing infrastructure to encourage empowerment firms, some of which are currently in joint ventures with Russian firm Renova Group, to cooperate with it. BHP Billiton owns 60% of Samancor Manganese while Anglo American owns the 40% balance. The company is the world’s largest integrated producer by sales of manganese ore and alloys. It, and Assmang, the unlisted investment of African Rainbow Minerals (ARM), have a stranglehold over manganese output from South Africa. South Africa’s manganese industry has been in a state of flux this year following potential changes of ownership in the sector. The first development was the award of prospecting licenses to empowerment firms when Samancor and ARM were optimistic of winning them. But a yet more concerning development was the sudden appearance of the $9bn Russian firm, the Renova Group, in the industry. After signing up the empowerment companies in joint ventures through a company called United Manganese of Kalahari, the Renova Group announced it hoped to spend at least $1bn building mines and a 300,000 ton/year ferromanganese smelter in Coega in South Africa’s Eastern Cape province. There are serious doubts water, people and infrastructure can be that easily acquired by Renova even if the signatures of empowerment partners can. Nonetheless, the cheque book and the political will – the proposed investment was made soon after Russian president, Vladimir Putin’s state visit to South Africa – were a worry to Samancor and ARM. And glossing these developments were the quite startling revelations of a Mail & Guardian article on November 10 in which it outlined irregularities in the granting of prospecting licenses to empowerment firms. It also identified one empowerment firm, Chancellor House, as an ANC investment vehicle. “ARM has some high quality assets and that’s where we’re focusing our energies,” said the company’s spokesman Pieter Rorich who won’t comment on possible negotiations with empowerment companies. ARM mines roughly 2.5 million tons of ore/year and has plans to build that up to 3.5 million tons/year by 2013/2014. Jacinto Rocha, chief of licensing at the South African government’s minerals and energy department, confirmed however speculation was mounting regarding strategic moves in the sector. "We’ve had no formal approach, but there is a lot of movement in the manganese. I’ve heard the talk of pooling and sharing arrangements in the Kalahari,” he said. Rocha’s boss, Sandile Nogxina, minerals and energy director-general, said his department would be cautious about pooling and sharing manganese resources. “We wouldn’t be supportive of that unless the BEE was retained,” he said.Free news alerts: click here to subscribe
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