‘We could have got bank finance, but only at an exorbitant rate. Banks only offer money when you’ve got it’
ORION Minerals’ Errol Smart has struggled mightily to resuscitate copper production in South Africa; far harder than you’d expect considering the advantages. For one, there’s a massive need for new copper supply in order to satisfy future demand driven by the global energy transition. Secondly, Orion has abundant resources in its flagship Prieska Copper-Zinc and Okiep Copper assets in the Northern Cape. Thirdly, these are former mines requiring less capital than new development would need. But the fact is Orion is yet to produce any metal.
It’s a source of massive frustration to Smart who cites low risk appetite among commercial banks as one of the factors. In response, he’s had to rephase Orion’s short-term capital spending plans by adopting a more conservative production profile. This has at least attracted the support of Triple Flag, a Canadian metals streaming and royalty company, as well as South Africa’s Industrial Development Corporation. Smart also received a boost when Clover Alloys took a 9% stake in Orion. But in November, Clover declined to exercise additional options in Orion that would have netted it A$73m.
All in the life of a minerals exploration and development company, you may say, but this is slow progress for six years’ work. So to the future? Production from Okiep Copper is Orion’s near-term goal with the Prieska Copper-Zinc mine to follow once it has derisked certain project elements such as dewatering the lower reaches of its mining infrastructure. Orion’s vision remains unchanged. And that is to restore the iconic copper assets under its control to production of up to 110,000 tons of copper concentrate a year. Hopefully that can be achieved within the next two years.
LIFE OF ERROL
Smart previously held positions at AngloGold Ashanti, Cluff Mineral Resources, Metallon Corporation, Clarity Minerals LionGold Corp and African Stellar Holdings. He’s a geologist by training, with a BSc Hons in economic geology from the University of the Witwatersrand. In addition to his day job at Orion, Smart sits on the board of the Minerals Council South Africa, where he represents the interests of junior miners. That’s the result of a commitment to Orion’s backers that he would get involved in making the fundamental regulatory changes required to turn South Africa’s mining industry around.