Vedanta Buys Anglo Zinc Assets

Vedanta Becomes World's Largest Zinc Producer

Vedanta Resources has bought Anglo American's zinc assets for $1.34 billion in a deal that will see it become the world's largest zinc producer.

After the deal has gone through, Vedanta will have 11 percent of the global zinc market, including the Skorpion mine in Namibia, Lisheen in Ireland and Black Mountain in South Africa.

"These high quality assets complement Vedanta's existing portfolio, creating the largest zinc and lead producer in the world," Chairman Anil Agarwal said.


The sale for Anglo is one step on a divestment programme that seeks trim its portfolio and focus on key commodities, such as copper, iron ore and platinum.

African Rainbow To Boost Production At Khumani Iron Ore Mine

African Rainbow Minerals CEO Andre Wilkens said on Tuesday that the company is on track to boost production at its Khumani iron ore mine in South Africa by 2012.

Speaking to Reuters on the sidelines of the Mining Indaba conference in South Africa Mr Wilkens said "We are certainly on track for the first phase and the second phase (expansion) and see full production at the end of the year 2012, from 10 million tonnes per annum to 16 (mtpa),".

ARM has formed a joint venture with Vale to explore for copper in Zambia, and other minerals in the Democratic Republic of Congo, Namibia and Mozambique. Mr Wilkens said that the JV would be also be looking specifically at platinum in Zimbabwe.

Exxaro To Dispose Of Rosh Pinah Stake

South Africa’s diversified resources group Exxaro is disposing of its 50.04 stake in Rosh Pinah Zinc and lead mine in Namibia, barely two months after Anglo American also announced its divesture from Skorpion Zinc mine.

The two adjacent zinc mines are situated in the sprawling semi arid but mineral- rich south western parts of Namibia.

Just like Anglo American, Exxaro said Tuesday that it is quitting the zinc mining and refining business and is putting under the block its portfolio of zinc assets which comprise Zincor Refinery in Gauteng, a 26 percent stake in Black Mountain Mining (Pty) Ltd, which owns Black Mountain zinc and lead mine and Gamsberg zinc project in Northern Cape. Under the hammer is a 22 percent stake in Chifeng zinc smelter in China. The zinc assets make up 2 percent of the group’s net assets and contribute 10 percent of its sales.

Exxaro said the move to dispose of Rosh Pinah and its entire portfolio of zinc assets is meant to cut overheads and prioritise capital expenditure.

“The latest measures provide a balance between our commodity and project portfolios and our long term growth aspirations. Our ongoing review of the business with particular emphasis on cost and balance sheet structures will ensure that we remain optimally positioned to meet all stakeholder expectations,” said Exxaro CEO Sipho Nkosi. “We believe that the cycle of the zinc metal is picking up and that it’s good time to sell. Anglo American, our partner at Black Mountain and our neighbour in Namibia, is also selling its zinc assets, which may be a very good suite of assets if offered for sale together. It remains to be seen whether that will take place, but it’s definitely an option,” Wim de Klerk, Exxaro financial director said.

Trevor Arran, Exxaro’s head of base metals section refused to put a price on Rosh Pinah but told The Southern Times that Rosh Pinah is a good and viable operation adding that Exxaro’s strategy is ‘just a configuration of assets.’

“Rosh Pinah is a good operation and there are good shareholders and our move is not meant to close the operation but just a change of shareholding,” Arran said.

Exxaro in June last whittled its stake in Rosh Pinah to 50.04 percent selling 43.8 percent to Namibia’s black economic empowerment group PE Minerals, which holds the mineral rights for Rosh Pinah and Jaguar Investments, whose shareholders vary from traditional authorities and individuals including employees. The June 2008 deal resulted in PE Minerals holding an 8 percent interest, Jaguar 38.99 percent shareholding and Employee Empowerment Participation Scheme with a 2.97 stake.

It is then expected that PE Minerals should be gunning for the Exxaro stake in the zinc and lead mine.

Arran said that there is still a lot to be done before the deal is finalised and could not say whether PE Minerals is interested in raising its shareholding in the mine. “PE Minerals and Jaguar have been good partners, well on site in terms of strategy and support but whether they will be interested I cannot comment,” Arran said.

Together with Exxaro’s Zincor refinery in South Africa, Rosh Pinah was part of a one of few integrated zinc mining and refinery operations in the world.

Rosh Pinah produces around 100 000 tonnes of zinc annually. Zinc mined at Rosh Pinah is refined at Zincor in South Africa.

Meanwhile Namibia’s black economic empowerment group PE Minerals is gunning for Exxaro’s 50.04 percent stake in Rosh Pinah zinc and lead mine, which the South African diversified group is disposing as it moves away from the zinc mining business.

The Southern Times can authoritatively reveal that PE Minerals, which already owns a 49 percent stake in Namibia’s second largest mine, Rosh Pinah wants the Exxaro stake to cement its grip on the zinc mining asset.

PE Minerals also owns mineral rights to Rosh Pinah.

The JSE listed Exxaro announced Tuesday that it is disposing all its zinc assets including the Namibian operation, Rosh Pinah. PE Minerals automatically opened negotiation channels with Exxaro.

Coen Wium, a senior official at PE Minerals told The Southern Times that as a shareholder in Rosh Pinah PE Minerals has the first right of refusal in a move which is likely to outflank other interested potential buyers.

“By nature of us being shareholders and holding mineral rights, nothing can happen without us having a say...they (Exxaro) must offer the stake to Namibians and we have the first right to either take it or refuse,” Wium said.

He added that negotiations for the Exxaro stake are being carried out in an open and transparent manner. Wium said that as a going concern Rosh Pinah remains a viable operation.

The mine currently has a 7 year life span but Wium said that with ongoing exploration and continued investment into the mine, the lifespan could be extended to more than 20 years.

Wium also said that Rosh Pinah has a good management team adding that any change in shareholding should not necessitate management shakeup.

But Exxaro’s divesture provides the right opportunity for Namibian investors to break into the largely multinationals dominated mining sector.

Most Namibia investors have been shying away from investing in the mining sector which is capital intensive and dominated by multinational corporations.

“This is an outright opportunity for Namibians and I can tell you we have a handle on this development,” Wium said. This is the second mining operation offered for sale in just three months.

Exxaro and Anglo, which both share equity in Black Mountain and Gamsberg zinc mines in South Africa, are pulling out of zinc business in Namibia.

Anglo is selling its wholly owned Skorpion zinc mine, which is adjacent to Rosh Pinah. The two mines share the small mining town of Rosh Pinah and have been pooling resources to develop the town as a separate entity of the mining business. Skorpion has however attracted the attention of Chinese firm Chinmetals of China, which reports said last month could be interested in the state of the art zinc mine and refinery.

The Namibian government through its Epangelo mining group, could also be interested in the stake.

Source: Southern Times

Weatherey To Re-open Namibia Copper Mines

Weatherly International Plc, which closed its four copper mines in Namibia late last year because of low prices, plans to reopen the mines after prices recovered, New Era newspaper reported, citing the company's country manager, Hans Nolte.

Weatherly Namibia is conducting feasibility studies to ensure that when the mines open again, they are less susceptible to price changes, Nolte told the newspaper. The company is also looking for 60 million Namibian dollars to expand its smelter, which didn’t close and relies on imported copper concentrates, Nolte said.

Source: Bloomberg

Avonlea Reports Positive Results From Namibia Iron Ore Project

Avonlea Minerals has reported encouraging sampling results from a set of iron prospects within the company’s Okatumba exclusive prospecting license 4129 in Namibia.

Avonlea said that it undertook its first exploration program in July 2009 and incorporated grab and surface channel samples were conducted over the Hammerhead, Bronzy, Nail and Tack targets in the northern part of the 1000 square kilometer EPL.

Avonlea said that it was enthusiastic that the initial assays indicated a very large scale magnetite rich mineralization zone at Hammerhead and neighboring prospects. It added that "Better surface channel sampling results from magnetite-rich zones included 300 line metres grading 23% Fe, 70 line metres at 28% Fe and 60 line metres at 27% Fe, while grab samples returning high grade zones of 49% and 45% Fe were also collected."

Source: The Economist, Namibia

National Aluminium, Hindustan Copper To Begin Prospecting In Namibia

India's National Aluminium Co. is in talks with Hindustan Copper Ltd. to explore for the metal in Namibia, National Aluminium Finance Director B.L. Bagra said today in a telephone interview with Bloomberg.

Namibia agreed last month to give Indian companies access to explore for copper and diamonds in the African nation, India’s Mines Minister B.K. Handique said on Sept. 16.

Source: Bloomberg

Namibian Flurspar Mine To Close Indefinitely

Nearly 300 workers at the Okorusu Fluorspar Mine, some 48km north of Otjiwarongo in Namibia, face uncertainty after management decided to close down the mine for what seems to be an indefinite period.

Mine workers were notified of the closure only three days before they were told to leave the mine.

The mine management told Namibian Sun that the mine would remain shut until the end of September as it is battling to sell its fluorspar on the international market due to the current economic crunch.

Managing Director of the mine, Mark Dawe, said that demand for fluorspar from the mine has fallen from 120 000 tonnes to only 62 000 tonnes. “We can not work with such little production so we have to temporary close the mine because we are not making profit at the moment,” he said.

Lack of communication between the employees, the mine and Mine Workers Union of Namibia (MUN) has caused uncertainty amongst the miners, who are in the dark about their fate at the mine. A miner who spoke to Namibian Sun said that he does not have much detail on what the union and the mine have decided about their future, prompting him to think that the mine is closing down for good.

According to Joseph Hengari, the General Secretary of MUN, the employees were initially expected to take three weeks’ leave but the mine had allegedly extended the period to one month and three weeks over the weekend.

“It is stated here in the agreement that they sent me, so I don’t know were the new agreement came from,” said Hengari. He went on to say that the mine had expected the employees to take the leave from their annual leave of three weeks, which was an unreasonable move from the mine’s side.

In the new agreement reached by the union and the mine, however, the clause was changed from “personal leave” to “company leave” for all employees. But, John Ekundi who represents the workers at Okorusu Fluorspar Mine still maintains that the workers are expected to take three weeks’ paid leave and in addition to that, another 15 days from their annual leave. He said employees who had already taken some of their personal leave days would just have to sacrifice their benefits as the situation came at a bad time. Ekundi also said that the workers have not been informed of the new agreement but they are looking at ways to inform them through the media.

Dawe has given his reassurance that workers will receive their full salaries and will not lose out on any benefits while on leave. He said all workers will return to the mine after the temporary closure and there is no talk of retrenchment, even though they can’t predict the mine’s future as it all depends on when the global financial crisis comes to an end.

Source: Namibian Sun

Purity Manganese Aims For Namibia Benefication Project

Manganese mining concern, Purity Manganese, has invested more than N$100 million in the modernisation of its manganese mine in Otjosondu, 200km north of Windhoek, in what the company’s management says is part of their bid to start the beneficiation of manganese in Namibia.

Purity, one of only two manganese mines in Namibia, has imported an assortment of heavy duty mining equipment comprising of excavators, crushers, conveyor belts and other components from China and South Africa at an estimated cost of N$100 million.

“We are in the process of replacing the crushers and modernising the operations of the mine to increase output and improve quality of ore,” said Purity Manganese Director Boris Bannai, an industrialist who has been in the manganese mining and smelting industry for over 20 years.

“We are installing nine new jigs, new conveyor belts and state-of-the-art technology that will significantly increase our output.”

Output of manganese ore from Purity is currently 10,000 tonnes per month, and is expected to increase to 50,000 tonnes per month after the installation of the new equipment, which Bannai said will be complete by June.

In addition to the installation of new plants and components on the mine, Purity this week reported that it had also acquired 30 haulage trucks and 25 trailers to transport manganese ore from the mine in Otjosondu to a railway siding in the nearby town of Okahandja, from where it is transported to Walvis Bay for shipping.

“We are putting people in four shifts, and will soon be recruiting an additional 150 workers. We will keep TransNamib and NamPort busy once the new plants are fully operational,” Bannai said, adding that the company was expecting an additional 11 containers of equipment and additional earth moving equipment to arrive on May 5.

Manganese ore and manganese alloy have seen a significant growth in demand on the global market, a trend that has been attributed partly to the growing use of manganese products as additives in unleaded petrol to boost octane ratings and reduce engine knocking.

Steelmaking and iron making account for between 85 percent to 95 percent of the global demand for manganese. The metal is also used in coins in the United States and lately, in the European Union, where manganese is used in the one and two Euro coins.

Purity currently ships its manganese ore to affiliated smelting companies located in China, and in future looking to expand its export to different countries. Manganese production in Gabon, Australia, the Philippines, Indonesia and China has seen a marked increase in the last few years, increasing competition among suppliers on the global market.

As a result, miners have been pressed to locally beneficiate more manganese ore into high-value manganese alloy to cut down on logistical expenses and increase their exposure to the global market.

Purity disclosed plans to install three furnaces at its mine at Otjosondu by the end of 2009, a move that would allow the company to smelt its own manganese ore and will create 500 additional jobs.

The mine has faced operational safety concerns in recent weeks, and as a result, Bannai hired a new mine manager, David Jacobs, who has been implementing an operational safety rollout programme that he says will involve the training of employees in mining skills and safety.

“I am a firm believer of the doctrine that says no job is too important to be done too safely,” said Jacobs, who has worked at mines in Lubumbashi, South Africa and Namibia.

“We will be seen as a big safety company. The skills level is generally not up to par, and we will teach employees and get them up to standard,” said Jacobs.

Purity Manganese employs 400 mine workers with varying skills levels.

Bannai said the mine had set aside sufficient funds for the development of staff housing, and was waiting for an approval from the Ministry of Lands to start building houses for the workers.

“We are just waiting for approval, capital is available. Once our application for land is approved we will provide housing for workers, as we expect to employ more people once our expansion is complete.”

Source: Informante, Windhoek, Namibia

Significant Uranium Find At Namibian Prospect

Uranium miner Kalahari Minerals Plc said on Tuesday that the Australia-based uranium explorer Extract Resources, in which Kalahari subsidiary Kalahari Uranium holds a 39.50 percent stake, had discovered significant uranium deposits at its Namibian prospect.

Kalahari Minerals said that the 108 million pounds of uranium oxide, at a grade of 430 parts per million confirms Rossing South as the highest grade uranium deposit in Namibia.

It gives the uranium explorer, Extract, a total resource estimate of 133.1 million pounds, Kalahari Minerals said.

Kalahari chairman Mark Hohnen said the deposit has become the highest grade granite-hosted uranium deposit in Namibia, and that future upgrades to the estimate could propel it into the top 10 global uranium deposits.

Hohnen said that with the location of Rossing South deposit, which is adjacent to Rio Tinto's Rossing Mine, Paladin Resources' Langer Heinrich Mine and Toronto-listed Forsys Metals Corp, the Rossing South deposit could be developed into a highly profitable project.