RBM declares “all systems go” on Zulti South expansion

Werner Duvenhage, MD, Richards Bay Minerals

RICHARDS Bay Minerals (RBM) declared ‘all systems go’ for its Zulti South mineral sands project after restoring community stability at the KwaZulu-Natal province operation.

The project – first scoped in 2019 to extend production of 660,000 tons annually by 25 years – would be put to Rio Tinto’s board next year, said Werner Duvenhage, MD of RBM.

Duvenhage was commenting after his company announced a power purchase agreement for 140MW of power to be piped to KZN from a wind farms project situated on the border of the Eastern and Northern Cape provinces.

Once constructed, the Khangela Emoyeni Wind Farm is expected to produce approximately 460GWh of renewable energy annually, said RBM in an announcement on Thursday. RBM’s power purchase agreement would reduce its carbon footprint a fifth, equal to a reduction of 420,000 tons of carbon dioxide.

In 2022, RBM signed a similar agreement for the Bolobedu Solar PV plant in Limpopo with Voltalia. The Bolobedu solar PV project, currently in progress, is anticipated to meet 17% of RBM’s power consumption by generating up to 300GWh of renewable energy a year.

Based on its 74% stake in RBM, Rio Tinto’s attributable capex for Zulti South was expected to be $343m ($463m total capex). But in 2020 the project was put on indefinite suspension following community-related violence in which RBM’s GM was murdered. A force majeure was also announced at RBM productive facilities.

The tension was so high that Rio Tinto CEO Jakob Stausholm met with South African president Cyril Ramaphosa in an effort to bring calm to the region. “We didn’t want further loss of life,” said Duvenhage today, adding that since 2021 disruptions at RBM’s facilities have been “unheard of”.

“We have been able to have a stable environment, the current operations are running very smoothly. We are glad about that. It has allowed us to continue work on Zulti South for approval by Rio Tinto shareholders,” he said.

A new feasibility study would be completed by “the end of the year or early next year” to be submitted for approval by Rio Tinto in 2025. Construction of a pilot plant was underway with the full project potentially starting next year, said Duvenhage.

RBM currently operates four mines in the Zulti North lease area, a mineral separation plant and a smelting facility. The plant produces zircon and ilmenite which has a range of industrial uses in the North American, European and Asian markets RBM supplies. Ilmenite is used in paint pigment and ceramics.

In addition to community related violence, RBM has also struggled with a fallout among its empowerment partners. In 2023, RBM published the results of a review into its community trusts which found they fell short on a number of metrics, including a failure to benchmark trustee fees. Another deficiency was that community beneficiaries were ill-defined.

The trusts, formed in 2009 as part of RBM’s black economic empowerment plan, have been subject to a full High Court review. A judgement of the three of the four trusts was imminent, said Duvenhage. Trustees of one of the trusts settled directly with RBM which had resulted in the release of significant funds, he said.