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30 Mar 2010 07:53
Ntsimbintle Mining, a South African black economic empowered company, signed a R430-million deal with Australian listed OM Holdings (OMH) on Monday for a new 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, a R1,5-billion manganese mine to be constructed near Hotazel in the Northern Cape.
Pallinghurst Co-Investors—headed by Brian Gilbertson—owns 49,9% of Tshipi, the local company said in a statement.
In another 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.
It already has a manganese mine in Australia and an alloy processing facility in China.
Breaking new ground
Ntsimbintle chairperson Saki Macozoma said the deal—under negotiation since last year—would be a trailblazer for trade ties between South Africa and Singapore.
“OMH’s strengths in project development, operations management and its China-specific marketing capabilities are a tremendous value-add to the partnership,” he said.
Macozoma said the transaction would strengthen trade ties between South Africa and Singapore and would benefit both partners.
He said Ntsimbintle was a broad based empowerment company with strong representation from Northern Cape charitable groups, which would result in the local Northern Cape community benefiting directly from the venture.
“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,” he said.
This would translate into jobs for the people of the Northern Cape.
Macozoma said the new mine would initially directly employ 350 people with many more indirectly benefiting from the provision of goods and services.
“Another positive facet of the deal is that we have an agreement with OMH to train previously disadvantaged South Africans in the marketing of manganese in their Singapore head office.”
He said that front end engineering design for the new mine was underway 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 tons of run-of-mine ore per annum.
It is expected that the resource is capable of supporting a 60 year life of mine with potential beyond even that time period.
OMH said that the deal reflected its positive global outlook and its interest in South Africa, which was 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,” OMH executive chairperson Ngee Tong Low said.
“This is in line with OMH’s objectives to be one of the world’s leading globally integrated manganese companies, with world-class resources to support operations from the mine to the market.”
He said the transaction allowed OMH to create a foundation to identify future South African and broader African manganese projects—while 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 said.
“Singapore’s favourable location and healthy trade links with China and Indonesia were also important considerations as OMH looked to further develop opportunities in those markets.”
Monday’s contract signing ceremony was witnessed by the SA Deputy Minister of Finance, Nhlanhla Nene, Singapore’s Senior Minister of State for Foreign Affairs, Zainul Abidin Rasheed, SA High Commissioner Dr Simeon Ripinga and Australian High Commissioner, Doug Chester.—Sapa
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