[miningmx.com] – NEWLY listed mine water retreatment company, Mine
Restoration Investments (MRI), said it would compete for a multi-million rand
government tender to clean acid mine drainage (AMD) on South Africa’s mines.
MRI bought Western Utilities Corporation (WUC), a private company that for six
years invested R75m researching technology to solve AMD, which is now becoming
critical on several South African gold mines. However, WUC’s technology was
rejected by the Department of Water Affairs in December on the basis that the
project had to be awarded through public tender, whereas WUC’s approach was
unsolicited, said Jaco Schoeman, CEO of MRI.
“I can’t guarantee that we’ll get that tender, but I can guarantee that we have the
best team and most appropriate solution. We’ve been sharpening our axe for six
years – we’ve done numerous studies; we’ve spent R75m accumulating data,’
Schoeman said in an interview.
The tender details could be made available as early as the next quarter, said
Schoeman. It’s hoped the tender asks for a solution to AMD in the three critical
basins where it occurs: the western, eastern and central basins of the
Witwatersrand. “If the tender is offered on individual basins the cost will go up,’ said
Schoeman, adding that the best business model for solving AMD was volume. “You
need the economies of scale. But it will be interesting to see what government
intends doing.
“Water is not particularly expensive, like gold,’ he said. He added that a public
private partnership might be the best way to structure the business as cleaned water
would have to be sold. “By 2014/15, the water supply system will be under stress
requiring implementation of phase two of the Lesotho Water Scheme,’ said
Schoeman.
MRI has two potential revenue streams: the water technology and a coal briquetting
business that will begin with beneficiating coal fines at Keaton Energy Holdings’
Vaalkraantz anthracite mine in KwaZulu-Natal province. Schoeman said this
technology was scaleable, but potential joint-venture partners first wanted to see
the technology work. Therefore, the business with Vaalkraantz acts as a pilot plant,
said Schoeman.
Given the pressure on government to solve AMD, the future shortage of water in
South Africa and the fact that coal remains key to energy generation, the ability to
reduce rehabilitation costs across all three areas help to provide MRI with some
unique strategic positioning, said Schoeman.
MRI is the first company start-up to list on the JSE’s Altx. It raised R40m in new
shares of which R20m will be pumped into briquetting the anthracite at Vaalkraantz.
The freefloat of MRI, at 20%, is relatively small. The main shareholders include
Watermark, which sold WUC to MRI, and Trinity Asset Management, a private equity
business of which Quinton George is a founding director with father, Peter. Shares in
MRI opened at 24 cents/share.
