Industry NEWS

18 November 2019

Savannah wins third Mutamba mining concession in Mozambique

Exploration and development firm Savannah Resources has conditionally secured a third mining concession (9228C) for the Mutamba project in Mozambique.

The mining concession 9228C was awarded by Mozambique’s Minister of Mineral Resources and Energy for the Mutamba Heavy Mineral Sands project.

The award represents a significant achievement for Savannah which operates a joint venture with Rio Tinto. It has a term of 25 years, which is valid until 3 September 2044, with a possibility of 25 additional years towards mine-life extension.

The mining concession covers an area of 11,807ha and is contiguous with 9735C and 9229C concessions, which were secured by Savannah in September. These permits cover ground in Inharrime and Jangamo districts in southern Mozambique.

The Mutamba project is in close proximity to the North/South EN1 highway and the port of Inhambane. It also benefits from a high-quality established transport infrastructure, a daily air service to Inhambane, and grid power.

Mutamba has an Indicated and Inferred Mineral Resource of 4.4Bt at 3.9% total heavy minerals and constitutes one of the largest remaining mineral sands deposits in the world that is yet to be developed.

Savannah CEO David Archer said: “The conditional award of the third Mining Concession to Mutamba Minerals Sands SA completes the tenement set of the Mutamba Project in Jangamo/Inharrime and represents a significant achievement for Savannah in its joint venture with Rio Tinto.

“To finalise the process, the normal administrative payments and processes need to be completed; these are currently underway for all three licences.

“We are completing the administrative conditions in a chronological manner following which all three licences will be fully formalised in due course, which, when completed, will continue to consolidate our position in the Mozambican mining industry.

“Once these three Concessions are formalised, they will enable the joint venture with Rio Tinto to progress the Pre-feasibility study (PFS) towards completion.”

The company’s interest in the heavy mineral sands project will rise from 20% to 35%, upon completion of the PFS.

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18 November 2019

South Africa’s platinum miners agree on wage deal with AMCU

South Africa’s platinum mining union Association of Mineworkers and Construction Union (AMCU) has signed three-year wage hike agreements with Anglo American Platinum (Amplats), Impala Platinum (Implats), and Sibanye-Stillwater.

The announcement comes after months of negotiations overpay for the workers of the platinum group metals (PGMs) miners.

In a press statement, Amplats noted that its wage agreement included an increase of R1,000 ($67.8) a month in basic pay for three years, or 5.5%, whichever is greatest, for each year of the agreement.

In addition to the increase in basic pay, Amplats employees will also receive an ex-gratia payment of R1,000 ($67.8) in July 2020 and R1,500 ($101.8) in July the following year.

Amplats CEO Chris Griffith said: “We believe this agreement will ensure the business can remain sustainable through the typical PGM price cycles, while our employees will benefit from meaningful pay and other increases.”

Meanwhile, Implats’ operating subsidiaries, Impala Platinum Rustenburg operations and Marula Platinum, agreed to a wage deal that assures employees of increases to all major components of remuneration for the next three years, including basic salaries, medical aid and pension fund contributions.

Implats said in a statement: “The agreement is in line with current mining inflation of c.7% and takes into consideration the reality of inflationary pressures faced by our employees.

“The agreement removes substantial uncertainty for our employees and allows a singular focus on the pursuit of safe and sustainable production.”

Precious metals producer Sibanye agreed to increases to the basic wage of Category 4 to 9 surface and underground employees for both the Marikana and Rustenburg operations of R1,000 ($67.8) a month or 5%, whichever is the higher for the first, second, and third year of the agreement.

AMCU chief negotiator Jimmy Gama was quoted by Reuters as saying: “It has never been an easy journey … but we managed to come to this day where we are all smiling.”

The Commission for Conciliation, Mediation and Arbitration (CCMA) played a major role in the wage deal.

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15 November 2019

Rio Tinto to provide $221m for uranium mine closure and rehabilitation

Rio Tinto has announced that it will subscribe to $221m rights shares of Energy Resources of Australia (ERA), which is required to close and rehabilitate the Ranger uranium mine.

The Ranger project is located in Australia’s Northern Territory. Rio Tinto holds a 68.4% stake in ERA, which plans to raise a total of $324m for the rehabilitation of the Ranger project area.

If ERA is unable to secure funds from third parties, Rio Tinto has agreed to fully underwrite the offer so as to make sure enough funds are available to meet rehabilitation obligations.

Rio Tinto Energy & Minerals group executive Bold Baatar said: “We take mine closure very seriously and ensuring ERA is able to fund the closure and rehabilitation of the Ranger Project Area, through participating in this entitlement offer, is a priority.

“We have committed to supporting this offer with the objective of ensuring ERA is in a position to rehabilitate Ranger to a standard that will establish an environment similar to the adjacent Kakadu National Park.”

Rio Tinto said that ERA has time until January 2021 to end mining activities, and until January 2026 to complete final rehabilitation of the Ranger area. ERA finalised its closure feasibility study for the rehabilitation in February.

In another statement, ERA said that Ranger rehabilitation expenditure is not expected to generate any direct financial return for the company.

In June 2015, ERA announced that half of its board members had resigned following the halting of its final feasibility study for the Ranger mine development.

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15 November 2019

ITA and RMI develop new assessment criteria for tin smelting companies

The International Tin Association (ITA) and the Responsible Minerals Initiative (RMI) have jointly published new assessment criteria for tin smelting companies. The new criteria seek to clarify a common upstream and downstream view of due diligence requirements for the tin supply chain.

These criteria, developed as part of a cooperation between ITA and the RMI through a MoU, are designed to be in line with the internationally recognised Organisation for Economic Co-operation and Development (OECD) due diligence guidance.

The new criteria will be used by RMI to replace their ‘Tin Standard for the Responsible Minerals Assurance Process (RMAP)’ following the completion of a transition period.

According to ITA, the criteria will also set the needs for responsible sourcing to be assessed by new evaluation processes under the ITA’s Code of Conduct for tin mining, smelting and recycling operations.

ITA sustainability head Kay Nimmo said: “We are excited to announce this important step forward in progressing due diligence and responsible sourcing for the tin industry.

“We are proud to be able to bring together multiple views of complex due diligence expectations into this one new harmonised text which will be recognised by assessment processes of both our organisations and the market.

“This will not only improve risk management but will help to streamline information requests through the supply chain.”

ITA stated that the new criteria will enable audit firms and their respective individual auditors to conduct checks to find out if any smelter has implemented OECD due diligence.

After a wide range of consultation feedback from stakeholders across the tin supply chain, ITA said that the criteria have been improved.

Responsible Business Alliance vice-president Leah Butler said: “This further demonstrates the leadership of both ITA and the RMI, and their determination to tackle the very significant challenges involved in bringing the entire supply chain together to provide realistic but robust solutions for the responsible production and sourcing of tin.”

RMI is an initiative of the Responsible Business Alliance (RBA). It is an independent body that addresses responsible mineral sourcing issues in mining supply chains.

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15 November 2019

Epiroc and Orica to develop automated explosives delivery system

Swedish mining equipment manufacturer Epiroc and commercial explosives provider Orica have formed a strategic collaboration to develop a semi-automated explosives delivery system. The system is designed to allow safer, more productive blasting operations in underground mines.

Under the partnership, the two entities will meet the growing demand for mining in more hazardous and challenging underground conditions.

Orica chief commercial and technology officer Angus Melbourne said: “This exciting partnership with Epiroc will allow us to leverage our exclusive wireless initiating system, WebGen, to deliver the critical first steps towards the automation of drill and blast operations.

“Automation is a key pillar of our technology strategy and supports our vision of transforming drill and blast to unlock mining value by creating safer and more sustainable operations.”

As part of the partnership, Orica and Epiroc will jointly optimise the process of explosives charging for underground mining operations.

Epiroc Mining and Infrastructure senior executive vice-president Helena Hedblom said: “This promising collaboration with Orica is an important first step on an exciting journey toward automating the whole drilling and explosives charging process.

“It is a vital part of both Epiroc’s and Orica’s vision of making the mining operation as safe, productive and cost-efficient as possible.”

The first prototype system is expected in 2020, while the first commercially available systems are scheduled to be operational the following year.

Orica is a provider of commercial explosives and blasting systems to the mining, oil and gas, as well as construction markets, while Epiroc develops underground mining equipment including face and production drill rigs.

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14 November 2019

Australian Government introduces funding for critical minerals sector

The Australian Government has announced new financing measures for its rare earths and critical minerals sector.

Projects that boost Australia’s ability to extract and process minerals will now be eligible for financial support through Export Finance Australia (EFA), with changes being made to allow projects to access dual funding through the EFA and the Northern Australia Infrastructure Facility (NAIF).

These projects include areas of the critical minerals sector that supply defence end-use applications, with these projects being eligible for a third source of funding through the Defence Export Facility.

Minister for resources and Northern Australia Matt Canavan said: “We are determined to develop our rare earth and critical mineral assets for the benefit of Australia and our technology-driven industries.

“By allowing proponents to secure financing through both EFA and the NAIF, we are enhancing opportunities for our critical mineral sector. This opens up new opportunities in trade and manufacturing, creating jobs of the future for thousands of Australians.

“With the increasing global uptake of electric vehicles, smart phones and renewable energy, Australia is well placed to become an international powerhouse to supply critical minerals, and the government is committed to developing world-leading projects which could help supply global markets.”

The government also plans to open a dedicated project facilitation office within the Department of Industry, and will commit A$4.5m to fund critical minerals research by Commonwealth scientific agencies.

Minister for trade, tourism and investment Simon Birmingham said: “Australia has world-leading reserves of critical minerals that present commercial opportunities for our businesses, as well as job creation potential in regional Australia=.

“With critical minerals essential to much of the innovation and technological development in industries such as defence, space, energy and advanced manufacturing, there are real opportunities for Australia to play a bigger role.

“This intensive focus across government could provide many critical minerals projects with access to advice or opportunities that helps to kick-start their operations and create export outcomes.”

The Australian Government’s latest financing measures for the critical minerals sector (which has rare earth oxide reserves of around 2.8 million tonnes) build upon a number of investments made in the sector over 2019, including the development of a National Resources Statement in February 2019, as well as the development of a Critical Minerals Strategy and the preparation of a Critical Minerals Investment Prospectus in March 2019.

Australian Prime Minister Scott Morrison also made an agreement with US President Donald Trump in September 2019 to develop a US-Australia Action Plan for Critical Minerals Cooperation, to support investment, research and development and diversity in critical minerals supply chains.

Canavan will meet with his counterparts in the US on 14 November 2019 to build further support for international collaboration on critical mineral supply chains.

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14 November 2019

Glencore to permanently close Brunswick smelter facility in Canada

Glencore Canada Corporation has announced plans to permanently close the Brunswick lead smelter facility in Belledune, Canada. 

The New Brunswick facility will be decommissioned immediately and the smelter will close all operations by the end of this year. The decision is expected to affect the jobs of around 420 employees.

Glencore Zinc & Lead Assets head Chris Eskdale said: “The decision to cease lead smelting operations at our Brunswick Smelter was a very difficult one. Despite years of efforts by committed employees and a strong management team, the smelter has been uneconomic since the closure of the Brunswick Mine in 2013.

“We have thoroughly assessed all our options and come to the unavoidable conclusion that the smelter is simply not sustainable, regardless of the recent labour dispute.”

The company said that it plans to provide pension, severance and outplacement support services for all affected employees. These will be agreed as part of closure settlements.

Eskdale added: “We are fully committed to working closely with employees and unions as well as other community stakeholders to mitigate the impact as much as possible.”

The company is also looking at various opportunities for Brunswick Smelter workers at its mining and metallurgical operations in other provinces.

Meanwhile, several locked-out Brunswick Smelter employees accompanied by United Steelworkers (USW) union activists are scheduled to block three Glencore operations in the Montreal area. The dispute is about maintaining health and safety standards.

USW Local 7085 President Bart Dempsey said: “The health of workers cannot be jeopardised as a cost-saving measure. This is not acceptable.”

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14 November 2019

WestStar agrees to acquire Australia’s Alltype Engineering

WestStar Industrial has executed a share sale agreement to purchase 100% of Australian construction and maintenance services firm Alltype Engineering.

The Alltype acquisition enables WestStar to expand its end-to-end project solutions capabilities through workshop fabrication, site installation, construction and maintenance services for industries across private and public sectors.

WestStar will pay A$5.9m ($4.04m) in an upfront payment, along with a deferred consideration subject to Alltype achieving its earnings targets. Alltype delivered revenues of $29.8m during the 2019 financial year.

Under the acquisition, WestStar will acquire advanced property, plant and other equipment related assets from Alltype Engineering.

WestStar Group CEO Robert Spadanuda said: “Alltype is a well-established and respected name in the industry and WestStar looks forward to pursuing the strategic integration opportunities, along with a greater diversity in disciplines and proven client relationships that Alltype provides.

“This acquisition broadens WestStar’s horizons and will significantly accelerate it towards increased revenues and earnings. With the addition of Alltype, continued growth in SIMPEC and continued execution of our growth strategy, we look forward to continuing to build a strong, diversified, engineering company.”

Alltype’s customers include mining giants such as BHP, Rio Tinto, FMG and South 32 among others, and it has a 7,000m² fully-equipped workshop for steel fabrication. It also serves ferrous and non-ferrous mining and mineral processing requirements across Australia.

Alltype Engineering managing director Kelvin Andrijich said: “We are excited by the opportunity to join WestStar and see it as a valuable opportunity for each of Alltype and WestStar to continue their growth with there being significant opportunities from a combination of the Alltype and WestStar businesses.”

The acquisition is expected to be completed in January next year, subject to satisfaction or waiver of the necessary conditions.

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