PHOSPHATE mine developer, Kropz, which is completing the Elandsfontein mine near Langebaan north of Cape Town, will need to raise about $80m to $100m in the longer term in debt or equity to develop future projects in Republic of Congo and Ghana.
Kropz raised about $35m ahead of its listing on the AIM market of the London Stock Exchange in November, which was less than the $40m it had hoped for.
The company’s biggest single shareholder is Patrice Motsepe’s African Rainbow Capital (ARC). Its CEO is the well-known, fast-talking Ian Harebottle, formerly CEO of Gemfields.
In a presentation to media in Johannesburg on Wednesday, Harebottle said about $120m has been spent on Elandsfontein to date. Another $16m will be spent on modifications to the plant to bring the mine into production by late 2019/early 2020. Some initial technical problems delayed first production, including the variable quality of the deposit and issues with processing. This coincided with a collapse in global phosphate prices last year to a 10-year low of $75/tonne. The price has since recovered to $95-105/tonne.
Harebottle said phosphate, which is used to make fertilisers, is an often-overlooked resource, but one which is becoming increasingly essential for intensive food production. He believes the cycle is starting to turn.
Kropz had to overcome fierce local opposition to its Elandsfontein project because of concerns about potential contamination of the Langebaan Lagoon. An appeal against its water use licence is still waiting for a ruling from the overburdened Water Tribunal but in the meantime it has established a water monitoring committee, including some of the parties opposed to the mine.
Harebottle said once Elandsfontein is at full production of 800,000 to 1 million tonnes a year (Mtpa) of 31% phosphate rock concentrate, it will be generating cash, which would make it easier to raise funds for subsequent projects. It has been negotiating offtake agreements with Foskor and two traders, Keytrade and Kalyaan.
Kropz’s objective within the next five years is to be producing about 3Mtpa from three mines, which would put it in the lowest cost quartile and amongst the highest-quality of phosphate producers globally.
Kropz is in the process of completing the buyout of shareholders in Cominco, which has done extensive work on the massive Hinda phosphate project in Republic of Congo. Hinda’s deposit is about seven times bigger than Elandsfontein’s. The plan is to produce about 1.5Mtpa to match market demand.
The third project, Aflao, is an early stage exploration to confirm that the HKK deposit in Togo extends into neighbouring Ghana. It could become a high-grade, low-cost mine.
