Mboweni buys stake in iron ore junior

[miningmx.com] — FORMER Reserve Bank Governor Tito Mboweni has stepped up his foray into mining, announcing that the investment vehicle controlled by him and his brother, Alto, would buy up to 20% of iron ore junior Ferrox Holdings, for $32m.

Ferrox Holdings controls the Tivani iron ore project in Limpopo. The company is raising money for the development of a 10 million tonnes (Mt) per year mine and 2.5Mt per year smelter.

Ferrox Holdings announced on Wednesday it has signed a memorandum of understanding with Mboweni Brothers Investment Holdings (MBIH). Ferrox, currently privately held and British Virgin Island-registered, has a 74% indirect interest in the Tivani iron ore project through its 100% indirect ownership of Tivani Ltd.

The company also has a 100% indirect interest in another South African subsidiary, Tzaneen Mining Projects, which has procured other prospecting rights in Limpopo.

Tito Mboweni currently chairs AngloGold Ashanti and is an international advisor to Goldman Sachs. His brother, Alto, is a chemical engineer.

Ferrox Holdings chairperson Jeff Ahbe told Miningmx the transaction with MBIH was not done for BEE purposes. “Mboweni Brothers and ourselves are strictly commercial partners,’ said Ahbe. “Of course it will add to our credentials, although we do not need it because we’re already empowered 26% by a local community at project level.’

Ahbe said MBIH would be given the option to invest in either or both Ferrox Holdings or the SA subsidiary, but the full investment of the $32m in Ferrox Holdings would be worth a 20% stake.

To date, Ferrox has confirmed 470Mt of measured, indicated and inferred resources at Tivani.

“Significant additional resources under its control are currently being evaluated, together with possible iron ore beneficiation to pig iron or steel in Limpopo, and the value added production of titanium and vanadium,’ read a company statement.

Ahbe said Ferrox would still need to complete a bank feasibility study for Tivani, but its application for a mining right had already been submitted. It hopes to start run-of-mine production within the next 24 months, ramping up to full production over 48 months.

At full production, around 2.5Mt per annum of iron ore concentrate would be generated for beneficiation within South Africa or for export.

“If smelted, an estimated 1.5Mt per annum of pig iron or steel should be produced, in addition to titanium dioxide slag and vanadium pentoxide,’ read the statement. “The production of approximately 500,000 to 800,000tpa of ilmenite is also being evaluated.’

Ferrox plans to raise $150m over the next 12 months for working capital, additional to MBIH’s investment, primarily via a listing on the Toronto Stock Exchange. Ahbe said the total project cost is estimated at $454m.