SA’s under-explored Northern Cape “a dripping roast” if Govt. would just open the door

Typical Northern Cape manganese vista; in this case: Tshipi

THE lack of minerals exploration in South Africa’s mining sector goes back to its corporatisation more than 60 years ago following the creation of Anglo American and its counterpart, General Mining.

In those days, mining houses did their prospecting in-house where the parent company charged service management fees to the underlying businesses, some of them listed. Apart from its inefficiencies, the system resulted in an investment tradition that rewarded the mighty and lost comfort in the two-bit entrepreneur; ironic, given the manner of Johannesburg’s own mining town origins.

Errol Smart, a South African who has worked in the Australian minerals development sector, is convinced the time is ripe to change history. It would be apposite: President Cyril Ramaphosa’s economic recovery plan is crying out for the kind of vigour Smart and other miners say they can bring, especially in the Northern Cape province.

“Geologically, I can tell you, having gone around the world and looked at terrains, the Northern Cape is an absolute dripping roast,” said Smart at the Joburg Indaba, a mining conference which this year was held virtually.

Said Smart: “Just on our 3,000 square kilometres of mining rights and prospecting rights alone, we have got 23 commodities of interest. It has everything from uranium and nickel and cobalt to platinum [group metals] and gold, and all the base metals you can dream of. There are very few places in the world where you can find a terrain like that”.

What’s needed is political certainty, regulatory liberalisation, and an online minerals rights registration system that works properly and isn’t victim to corruption, previously endemic in the Department of Minerals & Energy, according to mining sources.

With a mining cadastre in place, and the adoption of tax incentives specific to minerals exploration, such as flow-through shares currently being studied by mines minister, Gwede Mantashe, minerals exploration can be transformative in rural landscapes where investment and employment is most needed, said Smart.

Glen McGavigan, executive head of technical and projects at Kumba Iron Ore, a company controlled by Anglo American, said the surface had barely been scratched in terms of Northern Cape prospectivity, literally.

Given the lack of exploration activity in South Africa over the last 20 years, there was an opportunity to apply new technology to old prospects.

In July, the company approved the R7bn Kapstevel extension of Kolomela, a mining deposit which Kumba first found in the Fifties, said McGavigan. “The Northern Cape is under-explored and even the area we operate in,” he said. Other exploration targets have been discovered by Kumba.

“Because we had these great tier one assets, we didn’t need to look. But now we all need to look again. We had pre-conceived ideas about the geology.”

New technology led to the development of the $400m Gamsberg zinc project by Vedanta Resources near the Northern Cape’s Aggeneys, even though the project had been picked over and rejected for years by successive owners, first Gold Fields of SA and then Anglo.

Laxman Shekhawat, business head of Vedanta Zinc International, said a further expansion of Gamsberg and a new zinc smelter – helping to fulfil the South African government’s long-held dream of industrial beneficiation – is planned, but the green light for the expansion project is waiting on transport capacity improvements from Transnet.

This is the other major bottleneck standing in the way of the country’s exploration sector. Eskom, with its compound tariff increases of more than 50% over three years, also casts its shadow over the sector.

“At the current rate of mining, Gamsberg will mine for more than 100 years. This has to be speeded up because time is very important in this,” said Laxman. “In the long-term, we want to look at building a steel-making hub in the Northern Cape.”

“I want to speak to Laxmann about what we can do on base metals together in the region,” said Smart. “Equally, I want to speak to African Rainbow Minerals about its smelting technology, and I want to be speaking to Kumba about how we can cooperate on SLPs (social and labour plans) and training.

“Exploration will play a leadership role. It’s not a small difference but an absolute ground moving difference.”

7 COMMENTS

  1. “a dripping roast”, nogal🙄

    So, all the previous guys (that you are “speaking” to) are complete idiots for not pursuing these projects.
    Perhaps if you spoke less to them and listened more?
    And I’m sure it will take a lot more than a DMRE approval to “open the door” and generate a positive NPV.
    But, hey, desperation does strange things to the senses😅😅😅

    Good luck, lads.

  2. The intro to this story is a misrepresentation of the true history of the Northern Cape.

    Yes, the region is prospective and new exploration techniques will undoubtedly uncover meaningful new resources.

    No, the mining houses did not ignore the region as the intro suggests. There isn’t a project that Orion, Vedanta etc etc owns, that wasn’t originally drilled by these mining houses.

    Yes, they stopped exploring after 2000, when it became obvious that the rules were going to change. A logical move in an industry with long lead times.

    Next time you bump into Smart, ask him if Anglo, Anglovaal etc. perhaps drilled the odd hole around Prieska. 😉 Nuff said.

    • I totally agree with you
      The real reason for the delay in any major exploration projects in the Northern Cape or elsewhere in South Africa is all based on the corrupt influences in the mining industry controlled very much by the ANC government. Lots has changed since they (ANC) took control of the Mining portfolio and even though its “owned” by private enterprise its still controlled by the DMR and buddies within the ANC camp. Nepotism plays a major role in this country

      Nepotisms p,yas huge roel plsu tghe ppintemtns of uneducted window dresing

  3. I have bumped into Smart and he was very upbeat about the DMR and it’s ability to get things processed, in spite of the overwhelming evidence to the contrary just about everywhere else. How did they get along I wonder, when most other Companies/Applicants are struggling with years and years of inefficient “bureaucracy” (especially in the Northern Cape office)? Until the SAMRAD system is fixed and processing times are drastically reduced, there will be no improvement.

  4. Geostitute raises a very valid point. It has been reported that 5 years elapsed between the granting of the PR and the granting of the MR. Yet the same DMRE failed to grant a PR to 100% BEE owned entity with highly experienced technical support plus an investor lined for the prospect. It took 10 years for the DMRE to make this decision. The process was a master class in bureaucratic bungling and terminal incompetence. The DMRE have a delusion that they are doing a good job. The problem with the government is that they are all highly overpaid, seriously incompetent and that there is no consequences for not performing.

  5. At what cost? The mining operations around Postmansburg depleted underground water sources. Ask the draught ridden farmers around the area. Our crime rate in this small town can equal that of the Cape flats. So apologies for not jumping up and down with excitement .

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