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29 Mar 2010 17:52
South African black economic empowerment (BEE) company Ntsimbintle Mining, which is headed by Ntsimbintle chairperson Saki Macozoma, on Monday signed a R430-million deal with Australian-listed OM Holdings (OMH) that will create a new R1,5-billion manganese mine in the Northern Cape.
OMH has acquired a 26% interest in Ntsimbintle, which has a 50,1% stake in Tshipi é Ntle Manganese Mining (Tshipi), a manganese mine to be constructed near Hotazel in the Northern Cape.
Tshipi is 49,9% owned by Pallinghurst Co-Investors, headed by Brian Gilbertson.
In a separate development, Ntsimbintle and OMH have formed a joint marketing venture under which Singapore-based OMH will manage marketing activities for Ntsimbintle’s share of production from the new mine.
OMH is an independent manganese-focused producer, smelter and marketer with a manganese mine in Australia and an alloy-processing facility in China.
Macozoma says the deal, which has been under negotiation since last year, would strengthen trade ties between South Africa and Singapore.
“This transaction will considerably strengthen trade ties between South Africa and Singapore and will be beneficial for both partners,” said Macozoma.
Ntsimbintle is a broad-based empowerment company with strong representation from Northern Cape charitable groups, which will result in the local Northern Cape community benefiting directly from the venture, he added.
“The deal is a very good one for South Africa. OMH brings enormous expertise in the mining and marketing of manganese, and the proceeds of its acquisition of 26% of the company puts Ntsimbintle into a position where it is now able to fully fund its portion of the R1,5-billion needed to get the mine into production,” Macozoma said.
He added that the front-end engineering design for the new mine was already under way and options were being evaluated to determine the best way to provide rail transport for ore produced at the Tshipi mine.
“It is envisaged that mine production will reach market in 2013 although we are working to bring that date forward,” he said.
A feasibility study has indicated the Tshipi Mine has the potential to produce between 2,2-million and 2,3-million tonnes of run-of-mine ore per annum and it is expected that the resource is capable of supporting a mine with a 60-year life.
Macozoma said the new mine will initially directly employ 350 people with many more indirectly benefiting from the provision of goods and services.
OMH has also agreed to train previously disadvantaged South Africans in the marketing of manganese in their Singapore head office.
OMH said that the deal reflects its positive global outlook and its interest in South Africa, which is drawing investor interest with its physical infrastructure, sophisticated financial sector, relatively low-cost energy, broad technological base and support institutions.
“This investment serves as an excellent platform for OMH’s entry into the South African manganese industry,” said OMH executive chairperson Ngee Tong Low.
“This transaction allows OMH to create a robust strategic foundation for the identification and execution of future South African and broader African manganese projects—whilst facilitating exploration and other development opportunities. The move adds to the growth potential of our existing smelting business and supports the identification of expansion opportunities into energy-related commodities,” he added.—I-Net Bridge
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